Prince George's County Public Schools

Internal Audit
Manual

January 2017
 Table of Contents

I. Foreword…………………………………………………………………….Pg. 6

II. Definition of Internal Auditing……………………………………………...Pg. 6

III. Benefits of an Internal Audit………………………………………………...Pg. 6

Section A – Internal Audit Organization…………………………………………Pg. 7

A1. Authority………………………………………………………….….Pg. 7
A1.1 Mission Statement
A1.2 Executive Endorsement of Internal Audit Charter

A2. Department Standards……………………………………………….Pg. 7

A2.1 Institute of Internal Auditors IPPF and Generally Accepted
Government Auditing Standards
A2.2 Ethics & Code of Conduct
A2.3 Rules of Conduct

A3. Department Structure………………………………………………..Pg. 10

A3.1 PGCPS Organizational Chart

A3.2 Internal Audit Department Organization Chart

A4. Position Responsibilities………………………………………….…Pg. 10

A4.1 Director, Internal Audit
A4.2 Supervisor, Internal Audit
A4.3 Internal Auditor
A4.4 Investigative Auditor
A4.5 Information Systems Technology Auditor
A4.6 Business Analyst
A4.7 Lead Property Audit Technician
A4.8 Property Audit Technicians

A5. Internal Audit Office Policies and Procedures…………………………Pg. 14

A5.1 Internal Audit Contact Information

A5.2 Recruitment and Selection of Staff
A5.3 Probation
A5.4 Termination of Employment
A5.5 Employee Evaluations
A5.6 Training and Continuing Education
A5.7 Compensation
A5.8 Attendance
A5.9 Leave and Absence Policy
A5.10 Disciplinary Action
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 A5.11 Grievances
A5.12 Safety
A5.13 Employee Organizations

Section B – Audit Procedures and Techniques for Student Activity Fund and
Operational Audits……………………………………………………………..........Pg. 18

B1. Introduction…………………………………………………………………..Pg. 18

B2. Auditing Procedures………………………………………………..……….Pg. 18

B2.1 Auditor Assignment
B2.2 Statement of Independence
B2.3 Planning Budget
B2.4 Engagement Letter
B2.5 In-Office Review
B2.6 Entrance Conference
B2.7 Risk Assessment
B2.8 Audit Program
B2.9 Audit Fieldwork and Tests
B2.10 Working Papers – Purpose, Organization and Format
B2.11 Audit Findings
B2.12 Exit Conference
B2.13 Supervisory Review
B2.14 Quality Control / Monitoring
B2.15 Threats

B3. Audit Report………………………………………………………….Pg. 30

B3.1 Audit Report Organization
B3.2 Audit Report Review
B3.3 Audit Report Filing
B3.4 Audit Report Numbering
B3.5 Audit Report Referencing
B3.6 Management Response
B3.7 Internal Audit Report Tracking

Section C – Audit Procedures and Techniques for Special Investigation

Audits …………………………………………….………………..….Pg. 33

C1. Introduction
C2. Application of Investigation Standards
C3. Identification of Circumstances Requiring Special Investigations
C4. Audit Techniques for Special Investigative Audits
C5. PGCPS Compliance Hotline
C6. Evidence Gathering
C7. Investigation Audit Reporting

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Section D – Audit Procedures and Techniques for Information Systems Technology
Audits…………………………………………………………………Pg. 38

D1. Introduction
D2. Identification of Audit Areas
D3. Auditing Procedures
D4. Audit Reports

Section E – Audit Procedures and Techniques for Property Audits……………Pg. 39

E1. Introduction
E2. Responsibilities
E3. Identification of Audit Areas
E4. Audit Planning
E5. Audit Procedures
E6. Audit Reports

Section F – Ancillary Activities…………………………………………………….Pg. 40

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 Attachment Index

Attachment 1 Board Policy 8373, Internal Board Operations

Attachment 2 PGCPS Organizational Chart
Attachment 3 Internal Audit Department Organizational Chart
Attachment 4 Statement of Independence
Attachment 5 Sample Finding Sheet
Attachment 6 SAF Audit Program
Attachment 6.1 Auditee Action Plan
Attachment 6.2 Year to Date Financial Report
Attachment 6.3 Insolvency Report
Attachment 6.4 Audit Workpaper Review Notes Template
Attachment 6.5 General Internal Control Questionnaire
Attachment 6.5.1 Fraud Risk Assessment Questionnaire
Attachment 6.6 Cash Receipts Questionnaire
Attachment 6.7 Cash Disbursements Questionnaire
Attachment 6.8 Clubs/Organizations and Vending Control Questionnaire
Attachment 6.9 Sample Bank Reconciliation
Attachment 6.10 Cash Receipts Test Template
Attachment 6.11 Cash Disbursements Test Template
Attachment 6.12 Voided Checks Test Template
Attachment 6.13 Cancelled Checks Test Template
Attachment 6.14 Before and After School Learning Program Test Templates
Attachment 6.15 Risk Assessment Tool for Audit Selection
Attachment 6.16 Assessment Tool for Independence Threat to Non Audit Services

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I. Foreword

The Internal Audit function is essential in the conduct of successful operations of the
Prince George’s County Public School (PGCPS) system. It serves to examine and
evaluate financial, administrative and operational activities. The function assists in
detecting and preventing fraud, evaluating internal control, and monitoring compliance
with the school district’s policy and government regulations. Consequently, management
is provided with information to assist in their administration of resources for the effective
operation of PGCPS.

This policy addresses Internal Audit’s functional relationship with PGCPS’ Board of
Education as well as its administrative relationship with PGCPS’ management in effecting
independence throughout the audit process. This policy also sets forth the guidelines by
which the internal audit function will be carried on.

Internal Audit responsibilities will be performed consistent with the International

Professional Practice Framework and Generally Accepted Government Auditing
Standards. Auditors are required to adhere to the attribute standards (attributes of
organizations and individuals performing internal audit services), performance standards
(the nature of internal audit services and provide quality criteria against which the
performance of these services can be measured) and implementation standards (expands
upon attribute and performance standards) as well as the strongly recommended
guidance.

II. Definition of Internal Auditing

The Institute of Internal Auditors provides the following definition of Internal Auditing:

“Internal Auditing is an independent, objective assurance and consulting activity designed

to add value and improve an organization’s operations. It helps an organization
accomplish its objectives by bringing a systemic, disciplined approach to evaluate and
improve the effectiveness of risk management, controls and governance processes.”

III. Benefits of an Internal Audit

The Internal Audit function provides value to an organization. Some of the most
significant benefits include but are not limited to the following:

• Identification of deviations from management's policies and procedures and

expectations

• Evaluation of internal controls to help ensure management’s assets are protected

from loss, misuse, and abuse

• Objective assessment of areas of interest to management

• Confirmation that controls and procedures are adequate

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 • Recognized improvements to accounting controls to prevent and detect fraud,
waste and abuse

• Identification of productivity enhancements

• Recoveries of unbilled or under-billed revenues and duplicate payments

• Recoveries of vendor overcharges

• Recognized opportunities to automate procedures

• Assurance of automated computer controls

• Audits all schools, offices, departments, programs, grants and special requests

• Identification of efficiencies including best practices, cost savings and cost

avoidances

SECTION A - INTERNAL AUDIT ORGANIZATION

A1. Authority

A1.1 Mission Statement and Internal Audit Charter

Internal Audit’s mission is to support the school system’s Board of Directors and
management in the effective discharge of their responsibilities. To this end,
Internal Audit will furnish them with findings, analysis, recommendations,
advisory services and information concerning the relevant activities with the goal
of adding value and improving the school system’s operations. Internal Audit shall
evaluate the school system's controls to determine whether they are designed to
protect its assets and to facilitate the preparation of fair and reliable reports to
management. Ultimately, Internal Audit will assist the school system with
accomplishing its objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, controls and
governance processes.

A1.2 Executive Endorsement of Internal Audit Charter

Internal Audit’s authority and responsibilities have been endorsed by the PGCPS
Board of Education through Board Policy 8373, Internal Board Operations, Office
of Internal Audit. (Attachment 1)

A2. Department Standards

A2.1 Institute of Internal Auditor’s International Professional Practices

Framework (IPPF) and Generally Accepted Government Auditing Standards
(GAGAS)

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The department’s audits are performed based on specific auditing standards. The
term “audit standards” means the rules or principles established for determining the
level of quality for audit work performed. Audit standards are intended to define
the basis for consistent, reliable, high quality, professional audit results. Internal
Audit responsibilities are consistent with the Institute of Internal Auditor’s
International Professional Practices Framework and Generally Accepted
Government Auditing Standards which provide a structure for conducting high
quality consulting and attestation engagements with competency, integrity,
objectivity and independence.

A2.2 Ethics and Code of Conduct (GAS, Ethical Principles 1.10 and 1.11
and IPPF)

Auditing is vital to PGCPS’ accountability to the public. Therefore, internal

auditors are expected to conduct their work in accordance with the required
standards and to apply and uphold the following ethical principles:

i. Integrity – Internal auditors are expected to avoid any compromise of

professional value for personal gain. The integrity of internal auditors
establishes trust and thus provides the basis for reliance on their judgment.

ii. Objectivity - Internal auditors are required to exhibit the highest level of
professional objectivity in gathering, evaluating and communicating
information about the activity or process being examined. Internal auditors
make a balanced assessment of all the relevant circumstances and are not
unduly influenced by their own interests or by others in forming judgments.

iii. Confidentiality - Internal auditors respect the value and ownership of

information they receive and do not disclose information without
appropriate authority unless there is a legal or professional obligation to
do so.

iv. Competency - Internal auditors apply the knowledge, skills and

experience needed in the performance of internal audit services.

v. Professional Behavior – High expectations for the auditing profession

include compliance with all relevant legal, regulatory and professional
obligations and avoidance of any conduct that might discredit the auditor’s
work.

vi. Public Interest – Public interest is referred to as the collective well-being

of the community of people and entities served by auditors. By adhering
to the aforementioned code of ethics in performing their responsibilities,
auditors are honoring the public trust.

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A2.3 Rules of Conduct for PGCPS’ Internal Auditors

Internal Audit demonstrates compliance with ethical principles and a code of conduct by
adhering to the following rules:

1. Integrity - Internal auditors:

1.1. Shall perform their work with honesty, diligence, and

responsibility.
1.2. Shall observe the law and make disclosures expected by the
law and the profession.
1.3. Shall not knowingly be a party to any illegal activity, or
engage in acts that are discreditable to the profession of
internal auditing or to the organization.
1.4. Shall respect and contribute to the legitimate and ethical
objectives of the organization.

2. Objectivity - Internal auditors:

2.1. Shall not participate in any activity or relationship that may

impair or be presumed to impair their unbiased assessment.
This participation includes those activities or relationships
that may be in conflict with the interests of the
organization.
2.2. Shall not accept anything that may impair or be presumed
to impair their professional judgment.
2.3. Shall disclose all material facts known to them that, if not
disclosed, may distort the reporting of activities under
review.

3. Confidentiality - Internal auditors:

3.1. Shall be prudent in the use and protection of information

acquired in the course of their duties.
3.2. Shall not use information for any personal gain or in any
manner that would be contrary to the law or detrimental to
the legitimate and ethical objectives of the organization.

4. Competency - Internal auditors:

4.1. Shall engage only in those services for which they have the
necessary knowledge, skills, and experience.
4.2. Shall perform internal audit services in accordance with the
IPPF
4.3. Shall continually improve their proficiency and the
effectiveness and quality of their services.

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 5. The Public Interest – Internal Auditors:

5.1. Shall accept responsibility to serve the public interest.

5.2. Shall ensure that there is accountability for public resources.

6. Professional Behavior – Internal Auditors:

6.1. Shall comply with all relevant legal, regulatory, and

professional obligations and avoid any conduct that might
bring discredit to their work.
6.2. Shall put forth honest efforts in performing their duties and
professional services in accordance with the relevant
technical and professional standards.

A3. Department Structure

Currently the Internal Audit Department is staffed with the Director of Internal
Audit, Supervisor of Internal Audit, 7 Staff Internal Auditors, 1 Investigative
Auditor, 1 Lead Property Auditor, 2 Property Audit Technicians, 1 Information
Technology Auditor, and 1 Business Analyst. The Internal Audit Department
reports functionally to the members of the Board of Education and administratively
to the Chief Executive Officer. The Internal Audit staff has no direct authority or
responsibility for any of the activities reviewed or audited.

A3.1 PGCPS Organizational Chart (Attachment 2)

A3.2 Internal Audit Department Organization Chart (Attachment 3)

A4. Position Responsibilities

A4.1 Director, Internal Audit – Duties/Responsibilities

The Director plans, coordinates, and directs the day to day activities of the
department by performing the following:

• Provides leadership direction to development and operations of

Internal Audit infrastructure, resources and projects.
• Directs and manages Internal Auditors in entity-wide and audit
specific risk assessments designed to provide value to PGCPS.
• Oversees the development and maintenance of an integrated
entity-wide internal audit risk assessment approach and
database.
• Oversees fraud and other investigations conducted by the
Investigative Auditor and other Internal Auditors as assigned.
• Interacts regularly with executive staff to ensure significant
business risks are identified and addressed.

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 • Reports Internal Audit results and accomplishments to the
members of the Board of Education.

A4.2 Supervisor, Internal Audit – Duties/Responsibilities

The Supervisor directs staff performance while conducting student activity funds
and operational audits of varying complexity and scope. Additional
responsibilities include the following:

• Convey audit status to the Internal Audit Director.

• Lead proactively audit planning efforts.
• Assists with defining internal audit project scope and approval
timeframe.
• Execute individual audits for respective accounts.
• Develop audit procedures to assure proper fieldwork performed
as per audit plan.
• Supervise staff and review performance.
• Coach auditors and facilitate to resolve issues with schools or
operating areas.
• Review audit work papers to assure clarity and well-organized
documentation.
• Ensures key controls are tested and all imperative risks are
addressed to determine that financial transactions comply with
existing laws, contracts, Board policies and acceptable
accounting principles.
• Formulate apt conclusions relative to adequate internal controls
and procedures on the basis of knowledge of operations and
audit work performance.
• Assigns staff auditors to conduct professional training programs
for school staff as needed.
• Performs back-up duties in the absence of the Director of
Internal Audit.

A4.3 Internal Auditor – Duties/Responsibilities

Internal Auditors plan and perform assigned audits and analyses of student activity
funds, operations and investigations. Additional responsibilities include the
following:

• Examination and evaluation of the financial processes and/or

records of PGCPS to ensure that they are being operated
efficiently and economically and in compliance with BOE
policies.
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 • Preparation of audit findings and recommendations for
corrective action;
• Provision of advisory services, training and assistance to school
staff, etc.

A4.4 Investigative Auditor – Duties/Responsibilities

The Investigative Auditor performs investigations and monitors the whistleblower

hotline. Additional responsibilities include the following:

• Evaluates a variety of confidential issues including conducting

investigations of fraud, waste, abuse, mismanagement,
misappropriations, irregularities, allegations, etc.

• Reviews and reassesses and updates the Entity-wide Risk

Assessment

• Performs internal compliance audits, school operational or

financial audits and assists on special projects as directed by the
Director of Internal Audit

A4.5 Information Systems Technology Auditor – Duties/Responsibilities

The Information Systems Technology Auditor plans and performs assigned

Information Technology (IT) audits. Additional responsibilities include the
following:

• Handles a variety of confidential matters including: conducting

audits of departments and schools to determine the adequacy of
IT related internal controls in responding to risks of the system’s
technology network. In performing the responsibilities the IT
Auditor reviews IT systems controls policies and procedures;
assessing the degree of accomplishment of financial and IT
objectives and acceptable accounting and auditing principles.

• Monitors, educates, and provides information and analysis to

management on technology issues; reviews IT policies,
procedures, and systems relating to information technology and
recommends improvements for increased quality and cost
effectiveness.

• Assists and supports Internal, Investigative and Property

Auditors with audit assignments that include an IT component.

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A4.6 Business Analyst – Duties/Responsibilities

The Business Analyst supports members of the Board of Education by reviewing

and analyzing use of dedicated resources. Additional responsibilities include the
following:

• Participates with Internal Audit for the Board in gathering data,

analyzing information and providing related services directed
toward the compilation and evaluation of financial information
for Board Members;

• Participates individually in complex analyses or projects and/or

as a team member in more complex procedural and financial
analysis projects. This includes program budgeting system
development, payroll and accounting.

• Provides support to staff auditors by providing analytical

support and assisting with school audits as needed.

• Provides general support to the Director of Internal Audit and

Staff.

A4.7 Lead Property Audit Technician – Duties/Responsibilities

Under the leadership of the Director, the Lead Property Audit Technician
performs the following responsibilities:

• Serves as the team leader and coordinates audits of larger

facilities.
• Provides oversight of property audit activities for ensuring that
goals and objectives are met.
• Reviews the results of audits performed by property audit
technicians; ensures reporting reflects results of physical audits
performed.
• Conducts investigations and prepares reports to management
upon request relative to alleged fraudulent activities involving
PGCPS’ property.
• Facilitates property inventories of BOE properties
• Evaluates the condition and adequacy of property to assist in
determining program requirements including utilization,
maintenance and replacement.
• Obtains and analyzes justification for supplying property above
normal allowances.

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 • Conducts meeting with responsible management to address
inordinate property losses; prepares analysis reports for
submission to the Director, Internal Audit.
• Assists in the planning, establishment and maintenance of the
system of accountability and controls (Asset Management
System) and recommends new and revised procedures.
• Provides training and communicated opportunities for
continuing education to Property Audit Staff
• Maintains central inventory records

A4.8 Property Audit Technician – Duties/Responsibilities

Under the instruction of the Lead Property Audit Technician the Property
Audit Technician:

• Performs responsible and specialized work in the operation of

property inventory, accountability and control system
• Conducts fixed asset audits of Board of Education property
(schools and offices).
• Conducts audits of fixed assets to confirm that inventory control
procedures are maintained.

A.5 Internal Audit Office Policies and Procedures

Significant policies and procedures that are pertinent within the Internal Audit
Office are as follows:

A5.1 Contact Information - The Internal Audit Office can be

contacted as follows:

Internal Audit Department

Sasscer Administration Building
14201 School Lane Upper Marlboro, MD 20772
(301) 780-6888

The office hours of operation are 8:30 am through 5:00 pm

Monday - Friday

A5.2 Recruitment and Selection of Staff - Internal Audit staff are

selected based upon Board of Education policies that require
that application be submitted in response to advertised
openings. The screening process may involve interviews and
written tests when deemed necessary. Promotions are made in
the same manner.

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A5.3 Probation – Newly hired staff will be subject to a
probationary period that is determined by Human Resources at
hire. Normally this period is 6 months. Staff will be
considered permanent employees at the end of this period
unless otherwise informed.

A5.4 Termination of Employment - Staff are able to submit

resignation within Oracle HR module. However, as a
professional courtesy, it is requested that the Internal Audit
Director is notified personally at least 14 calendar days prior to
resignation. Involuntary terminations are conducted at the
direction of Human Resources.

Employees failing to report to work for 3 consecutive work

days without authorized leave are subject to termination. The
employee may be reinstated only in the event that it is
determined that extenuating circumstances prevented contact
with Internal Audit Director.

A5.5 Employee Evaluations – Human Resources requires that

employees are evaluated annually. Staff evaluations are
performed by the Internal Audit Supervisor for staff auditors.
All other staff members are evaluated by the Internal Audit
Director.

A5.6 Training and Continuing Education - GAGAS require that

staff conducting and managing audits earn 80 hours continuing
education biannually, 24 of which must be directly related to
government auditing. IPPF Attribute Standard 1230 also
requires internal auditors to enhance their skills, knowledge
and other competencies through continuing professional
development by completing a minimum of 40 CPEs annually.
Staff are required to personally make arrangements to ensure
that this requirement is met. Training opportunities including
conferences, webinars, online courses, training manuals and
internal training opportunities may be offered to assist in this
effort.

A5.7 Compensation - Staff compensation is determined by Human

Resources upon hire. Although pay increases may be
recommended during the staff evaluation process, the Internal
Audit Director does not have authority to enforce payment.

A5.8 Attendance – Staff are expected to be available during

business hours conducting Internal Audit assignments unless
on authorized leave. Staff must work a minimum of 8 hours
daily. However, assigned responsibilities may extend beyond
the normal work day and work week. Each staff is entitled to a

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 duty-free lunch period of at least 30 minutes. The lunch period
may be coordinated and determined by the Internal Audit
Director. Internal Audit does not recognize a telecommuting
policy as it has not been established by the Board of
Education.

A5.9 Leave and Absence Policy - Internal Audit staff earn annual
and sick leave days that may be approved for use at the
discretion of the Internal Audit Director. Staff must be
mindful of responsibilities and assignments when requesting
leave. The Internal Audit Director will approve time off while
considering these factors. Approval of leave time does equate
to an extension of time for completion of tasks. Staff will be
expected to reach predetermined deadlines unless the Director
has agreed to an extension. Staff should not consider
submission of a leave request as an automatic entitlement to
take time off even though they have available leave balance.
Managerial approval is an essential component of the leave
management process.

Annual Leave: Internal Auditors are required to submit

requests for annual leave using Oracle Time and Attendance.
These requests are required to be submitted at least 2 work
days before the date of the requested leave. Annual leave
requests submitted less than 2 work days is subject to denial
and should be avoided. This is especially the case with same
day leave requests. Staff should appropriately plan for
absences. Unplanned annual leave should be requested on a
limited basis and approval will be considered by the Director
dependent on circumstances.

Internal Audit staff is required to communicate verbally to the

Internal Audit Director their intent to request annual leave
prior to submission in Oracle. Internal Audit staff should
ensure that leave requested has been approved before it is
taken. Leave taken that has not been approved will be
considered LWOP. Annual leave will not be granted that
exceeds the amount of the employee’s earned leave.

Sick Leave: Internal Auditors may request sick leave to be

used in advance or as unplanned leave.

Sick leave that is unplanned must be called in prior to the

employee’s scheduled arrival time. The call must be placed to
the Internal Audit Director, Supervisor or Business Analyst. If
neither is available, a voicemail should be left for the Director.
An email should also be sent to the employee’s supervisor

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 whenever the employee has knowledge that the Director is on
leave.

Sick leave extending past 3 days requires a signed physician’s

document. This document must be presented on the date the
employee returns to work. Failure to present this document
will result in the extended leave being considered LWOP.
Sick leave exceeding 10 days must be requested through
Absence Management.

Internal Audit Calendar: All approved leave must be entered

on the shared Internal Audit calendar. The Business Analyst or
Director will enter called-in leave on the calendar.

A5.10 Disciplinary Action: Internal Audit staff are required to follow

department standards including professional ethics and code of
conduct as described in Section A2. Staff members are also
subject to the professional requirements set forth by PGCPS for
all employees. Reasons for disciplinary action that could
potentially result in termination include but are not limited to
the following:

• Incompetence or other unsatisfactory performance

• Insubordination
• Unauthorized absence
• Violation of administrative regulation and department
rules
• Excessive tardiness
• Acceptance of gratuities
• Abuse or theft of PGCPS’ property
• Any conduct that reflects unfavorably on PGCPS and the
Internal Audit Department

A5.11 Grievances: Staff with complaints or grievances should first

attempt to resolve the issue with their immediate supervisor. If
the matter cannot be settled at that level, the issue should be
escalated to the Internal Audit Director and finally to the
appropriate Human Resources official if the matter remains
unsettled. The Internal Audit staff is not represented by
collective bargaining units.

A5.12 Safety: Staff are responsible for observing and maintaining

safety measures in the area of their assignment. Unsafe conditions
should be reported to supervisory staff at once to help ensure the

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 condition is corrected. Internal Audit staff are provided secure
access to the Internal Audit office facility. It is each employee’s
responsibility to safeguard access codes, keys, and combinations
provided. Staff are also responsible for securing access to
equipment such as laptops that have been provided for conducting
audit tasks.

A5.13 Employee Organizations: Staff are encouraged to join

professional organizations that enhance knowledge and job skills.
Specifically Internal Audit staff is encouraged to join the Institute
of Internal Auditors, Association of Local Government Auditors
and the Association of Certified Fraud Examiners. The Internal
Audit Office will fund the cost of memberships at the discretion of
the Internal Audit Director.

SECTION B - AUDIT PROCEDURES AND TECHNIQUES FOR STUDENT

ACTIVITY FUND AND OPERATIONAL AUDITS

B1. Introduction

This portion of the manual prescribes policies and procedures to be used in

the performance of an internal audit from the point it is assigned until the
audit report is issued. The Audit Director is primarily responsible for all
phases described herein, including review of staff auditor fieldwork. Staff
auditors work under the direction of the Audit Director, who approves all
audit programs, work files and audit reports. The Audit Director is
responsible for oversight of work performed by the entire Internal Audit
staff.

The Director of Internal Audit develops an annual audit plan that lists the
activities to be audited and the estimated hours for completion. Matters
considered in establishing audit priorities are generally established using a
risk analysis model. This model uses various criteria to evaluate functions
within the school system that pose the greatest risk to the Board of
Education. Requests from the Board of Education as well as the CEO are
also considered in development of the audit plan.

B2. Auditing Procedures

The following are basic steps for conducting an internal audit:

B2.1 Auditor Assignment – Staff auditors are required to submit

quarterly projections of schools to be audited with their quarterly
reports. Projections are performed by auditors based semi-annual
risk assessments.

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B2.2 Statement of Independence – Each member of the audit staff is
required to complete and sign a Statement of Independence (see
attachment 4) to document that he or she is free from personal and
external impairments to independence for each engagement. Audit
staff are required to report independence impairments to the Audit
Director, whether actual or implied, prior to beginning the assigned
audit. If impairment is identified, another auditor is assigned to the
audit.

B2.3 Planning Budget – Before any work is performed on an assigned

audit, a preliminary time budget should be obtained from the Audit
Director for operational and special request assignment audits.
Budgeted hours for assignments that are part of the audit plan are
predetermined, however hours may be changed at the discretion of
the Audit Director if deemed necessary. The budgeted hours for
High Schools are 80, Middle Schools – 60 and Elementary Schools
– 40 unless there is a Before and After School Care Extended
Learning Program where an additional 16 hours are allotted.
Although the planning budget should be developed with a
significant amount of time allocated to fieldwork, it should be
relative to the audit assignment as a whole. For purposes of
adequately controlling the time allotted, the budget should be
broken down into the following general categories: Planning,
Fieldwork, Report Writing and Editing, Supervisory Review, Exit
Conference and Auditee’s Action Plan.

B2.4 Engagement Letter –An engagement letter should be sent to the

highest level manager responsible for administration of the
respective process area, prior to beginning the engagement when
conducting an operational audit to provide advance notice and
courtesy to the auditee organization. The letter should identify the
specific area to be audited, names of audit staff assigned,
notification of the entrance meeting, and any other pertinent
information. Engagement letters are only sent for operational, IT
audits and special projects. School audits are routine and numerous.
An engagement letter is not usually sent when student activity fund
and special investigation audits are conducted. However, internal
auditors may provide advance notice to principals when conducting
student activity fund audits as courtesy, by telephone and/or e-mail.
At that time, the timing and scope of the audit is communicated.
Due to the nature of hotline investigations, engagement letters are
not sent. BOE Policy 8373, Office of Internal Audit provides that
Internal Audit has free and open access to documentation.

B2.5 In-Office Review – An in-office review is necessary for the in-

charge auditor to gather insight about the subject area to be audited
prior to the entrance conference. During this time, the in-charge

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 auditor should begin reviewing background information concerning
the auditee’s process requirements and internal control environment.
Prior year audit reports and workpapers may be reviewed and a
planning meeting with the audit team should also be held to discuss
the audit assignment. The results of this process should enable
audit staff to identify the audit objectives and scope and make
pertinent inquiries during the entrance conference.

B2.6 Entrance Conference – The entrance conference with the auditee

should set the cooperative tone of the audit. The auditors should be
open and candid about the audit objectives and scope. Internal
Audit staff assigned should be introduced and the auditor should
request work space, access to needed files, and any other pertinent
needs at that time. The audit process should be explained as well as
the process for discussion of findings and issuance of the audit
report. Internal Auditors performing student activity fund audits do
not perform a formal entrance conference since those audits are
routine.

B2.7 Risk Assessment – Auditing standards require that auditors obtain a

sufficient understanding of the entity and its environment, including
its internal control, to assess the risk of material misstatement of the
financial statements whether due to error or fraud, and to design the
nature, timing and extent of further audit procedures. The
objectives of internal control and fraud risk surveys are to gather
enough data for the auditor to become familiar with the function,
understand the flow of financial and other information, recognize
the risks and design of controls within the function, and develop an
appropriate audit program to address audit risks. The preliminary
survey should result in documentation in the form of narratives,
flowcharts, internal control evaluations, and other key items.

For operational audits the In-Charge auditor should identify the

following:

• Expectations of the process or activity,

• The objectives that have been established,
• Established goals and whether they are effective in meeting
the objectives,
• Significant policies, procedures, laws and regulations
affecting the auditee,
• Processes or activities developed to ensure objectives are
accomplished effectively and economically,
• Inefficiencies or uneconomical practices,
• How resources are protected,

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 • How the process or activity is performed, monitored and
measured
• Method for reporting results of the process or activity and
• Financial profile of the activity to include how much is spent
to achieve goals

The audit program should include steps to identify and assess fraud
risks. The auditor should also consider the risks for fraud
(individuals’ incentives or pressures, opportunity for fraud to
occur). An organizational chart as well as statements of
responsibilities of the auditee should be obtained. As the
preliminary survey is conducted, the auditor may identify areas that
should be pursued or tested.

B2.8 Audit Program – An audit program is a detailed plan for

completing an audit. It serves as a guide of proposed procedures for
the auditor to follow. Its purpose is to organize and control work
steps designed to be responsive to the audit objectives and or risks
in accordance with prescribed auditing standards. Following an
approved, detailed audit program helps keep the auditors on track
and prevents them from pursuing irrelevant items. The audit
program should be prepared after the preliminary risk assessment
and before any test work is performed. Any changes to the audit
program must also be approved in writing by the Audit Supervisor.
Every audit procedure should help answer one of the audit
objectives and every objective should be addressed in the
procedures or steps. Audit program procedures should be in
sufficient detail to allow an experienced auditor to perform testwork
with normal supervision.

B2.9 Audit Fieldwork and Tests

a.) Obtaining sufficient, appropriate evidence – Government

Auditing Standards require auditors to obtain sufficient,
appropriate evidence to provide a reasonable basis for their
findings and conclusions. In assessing sufficiency of evidence,
auditors should determine whether enough evidence has been
obtained to persuade a knowledgeable person that the findings
are reasonable. Appropriateness is the measure of quality of the
evidence for providing support for findings and conclusions
relative to the audit objectives. Auditors should use
professional judgment to determine the sufficiency and
appropriateness of audit evidence taken as a whole. When
auditors identify limitations or uncertainties in evidence that is
significant to audit findings and conclusions, they should apply
additional procedures such as seeking independent,
corroborating evidence from other sources. The nature and

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types of evidence to support auditors’ findings and conclusions
are also matters of the auditors’ professional judgment based on
audit objectives and audit risk. Testimonial evidence may
sometimes be useful in interpreting or corroborating
documentary or physical information. Documentary evidence
may be used to help verify, support, or challenge testimonial
evidence. Internal Auditors should attempt to obtain
documentary evidence whenever feasible to support audit
conclusions. Some considerations for auditors when obtaining
sufficient, appropriate evidence are the following:

• Evidence obtained when internal control is effective is

generally more reliable than when internal controls are
weak.
• The greater the audit risk, the greater the quantity and
quality of evidence required.
• Stronger evidence may allow less evidence to be used.
• Having a large volume of audit evidence does not
compensate for a lack of relevance, validity, or
reliability.
• Evidence obtained through the auditors’ direct physical
examination, observation, computation and inspection is
generally more reliable than evidence obtained
indirectly.
• Examination of original documents is generally more
reliable than examination of copies.
• Testimonial evidence obtained under conditions in
which persons may speak freely is generally more
reliable than evidence obtained under circumstances
where persons may feel intimidated.
• Testimonial evidence obtained from an individual who is
not biased and has direct knowledge about an area is
generally more reliable than from someone who is biased
or has indirect or partial knowledge of an area.
• Evidence obtained from a knowledgeable, credible and
unbiased third party is generally more reliable than
evidence from someone who has a direct interest in the
audited entity.
• Evidence is not considered sufficient and appropriate
when using the evidence carries an unacceptably high
risk that could lead to an incorrect or improper
conclusion.

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 b.) Audit Sampling – Frequently a sampling of items; i.e.
transactions or files must be selected for testing. When
sampling is used, the method of selection that is appropriate will
depend on audit objectives. Generally, the selection should be
designed to be representative and random (each item in the
population has an equal chance of being selected.)
Stratification (selection of items containing various
characteristics) should also be used in the selection. The size of
the sample selected should be designed to provide appropriate
reliability of the condition of the population, using a given level
of confidence. The sampling technique used as well as the
nature of samples that are used to gather audit evidence should
be clearly described in the scope. Sampling techniques
available to the auditor are the following:

• Statistical Sampling – requires all sampling units in the

population to have an equal chance of being selected. The
sample size is mathematically calculated based on a desired
confidence level, desired precision and expected error rate.
The sample selection is computed using either computer
programs or random number tables.

• Judgmental Sampling – selection is based on auditors’ sound

and seasoned judgment. Selections are based on the value of
items, relative risk and representativeness.

• Random Sampling (haphazard) – items are selected without

intentional bias to include or exclude certain items in the
population. While sample sizes are predetermined, the
selection of sampling units is selected using computer
programs or random number tables.

c.) Data Reliability – Audit standards require determination that

computer-processed data is reliable enough to be used. When the data
is intended to be used to support engagement findings, conclusions and
recommendations, reliability must be assessed. This work is required
whether the data is provided to the auditor or the auditor extracts the
data. Information can be assessed in the form of reports or interviews
with individuals who are knowledgeable about the data and the system.
The Information Technology Auditor may also assist with this process.

B2.10 Working Papers – Purpose, Organization and Format

Audit Standards require that Internal Auditors must document relevant

information to support the conclusions and audit engagement results. The
workpaper file is primarily a record of the evidential material prepared and
collected by the auditor in carrying out the plan specific to the audit
undertaken. It is the basis upon which findings relevant to the audit are

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 supported. Effective October 1, 2014, Internal Audit transitioned from
manual workpaper documentation to a semi-electronic form of workpaper
documentation. Workpapers are documented using Adobe Pro and are
housed on the department’s secured G-drive.

a.) Purpose - Workpaper files serve as a basis for planning and scheduling
subsequent audits. Internal Audit’s policy is to present a full and
complete record of each audit by ensuring the following:

• Each workpaper should address or assist in addressing one or more

of the audit objectives.
• The audit workpapers should identify 1.) Procedures followed 2.)
Records examined 3.) Inquiries made, and 4.) Conclusions reached,
etc.
• When testing and sampling is involved, the workpapers should
include a record of the items tested and support for judgments used
in determining sample selection.
• Adequate planning and supervision should be documented including
audit programs and results from supervisory review.
• Review of the system of internal controls should appear in the
workpapers.
• Identification of how exceptions and unusual matters were resolved
should appear in the workpapers.
• Documentation of persuasive evidence in support of findings and
formation of conclusions and opinions should be included.
• Only data that is sufficient, relevant, competent and useful in
providing a sound basis for findings should be included.
• Workpapers should be prepared accurately, neatly, clearly and
concisely.
• The workpapers should be legible, well organized and completed
timely.
• Workpapers should be prepared in sufficient detail to enable
someone with no previous connection with the audit to understand
from the documentation the nature, timing, extent and results of
audit procedures performed. The audit evidence obtained and its
source and the conclusions reached should also be clear. Auditors
should also recognize that the workpapers could potentially be used
as legal evidence.
• All PGCPS Internal Audit workpapers are considered confidential
as well as BOE records requested during the engagement. The
workpapers and records must be safeguarded at all times. These
items must be locked in cabinets or desks or saved on the secured
G-drive after working hours and at other times when the office is
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 unattended. Materials used offsite such as in schools and offices,
must also be secured when unattended even momentarily. Although
these precautions may cause some inconvenience, they are essential.
• Workpapers must be maintained on file until five years after the
report date.

b.) Organization – The amount of documentation and number of

workpapers that will be included in a workpaper file will vary with the
size and type of engagement. Generally, auditors should plan and
determine a workpaper’s primary purpose and what is to be included on
the workpaper before preparation. The workpapers should be assembled
to allow primary information for the final report to be readily accessible.
Each major section of audit should be represented by a lead schedule,
summary, or memorandum as appropriate. Organization of the papers
should flow logically from the audit work program to those they are
cross-referenced. Working papers should be organized and prepared to
bring important details to the attention of anyone using and reviewing
them. The template for workpapers that should be used when auditing
student activity funds is included in attachments 4 through 6.14.

c.) Format – Schedules, analyses, conclusions, comments and other matters

often constitute the body of workpapers. Each workpaper should clearly
identify the audit and show clearly the nature of the data contained.
Each workpaper should stand alone. This means that if for some
reason a single workpaper were to be separated from the body of the file,
it could be understood by someone with no connection to the audit.

(1) At a minimum each workpaper heading should contain:

• Name of the organization

• Name of School or Office
• Name of Activity
• Time period covered by the audit
• Identification of audit workpaper title
• Initials of the auditor who prepared workpaper
• Workpaper index
• Date workpaper was prepared
• Supervisory approval initials and date

(2) Identification of the data or matter being examined and/or the

evidence of the review should be recorded in the body of the
workpaper. If such information is typed or computer generated,
it must be marked as, “PBC” or Prepared by Client. This allows

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 the reviewer to know that this data was not created by the
auditor. Other items that must be included on each workpaper
are:

• Purpose – documents the purpose or intent of the

workpaper. The purpose is usually described with a
narrative, i.e. “to list overtime payments made;” “to
reconcile listing with payroll records;” “to record results
of interview with…;” etc.
• Source –It is always useful to identify the source of
information gathered that is recorded on the workpaper,
i.e. computer generated reports, department files, etc. This
will provide ease of obtaining similar documents for future
audits and will also give the reviewer some perspective.
• Scope – sets out the extent of the audit examination, which
may include the volume of transactions involved, the
quantity examined, the percentage of total volume the test
represents, the basis of selection, and time period of the
specific examination covered.
• Conclusion - this should include a brief write up that
explains any conclusions drawn from the work performed.
It should relate to the “Purpose” previously listed.
Conclusions are drawn from analysis and interpretation of
the results of the test and from any related facts. Although
the conclusion should be based on data presented on the
respective workpaper, if it is based on data recorded on a
different workpaper, it should be clearly stated. The
conclusion should not contain a broad assertion such as
“conditions need improvement” or “condition requires
correction.” It should be specific to the objective
established. Whenever a conclusion indicates an
inappropriate result, an audit finding pertaining to that
result should be developed.

(3) Indexing (Numbering) – the purpose of indexing is to keep

workpapers organized and easy to follow. This helps ensure
that the auditor can see relationships and a logical flow of work.
Proper indexing helps facilitate having workpapers where any
analyses or section of the examination may be found quickly.
Each lead workpaper or schedule should have an index number
and/or letter assigned and marked in the top right corner for
reference. Page numbers should also be included at the bottom
right of each page. Supporting schedules should be cross-
referenced to lead schedules. While no specific indexing format
is required, use the rule of common sense for indexing. A
unique index letter (A, B, C…, etc.) should be used for each

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 major section. Each major section of the audit file should
correspond to an audit objective in the audit program. A
standardized list of areas audited and corresponding page
numbers should be included as the first page in each binder to
serve as the Table of Contents. Indexing should be recorded in
red.

(4) Tickmarks – When an audit step is performed repetitively on

data included in the body of a workpaper, tickmarks are used to
identify the work performed. For example, several payments to
employees for overtime worked may be selected for testing to
determine that overtime hours worked were properly approved.
Rather than writing this description for each payment tested, a
“tickmark” such as a checkmark may be used and explained
either at the bottom of the workpaper or on a separate schedule
of tickmarks used. A cross-reference should be included on the
workpaper whenever a separate schedule of tickmarks is used.
Each tickmark must be unique. A single and separate tickmark
should be assigned and used for each attribute tested i.e., a
checkmark for “traced to supporting documentation;” an asterisk
for “payment was properly approved,” etc. However, the use of
too many tickmarks on a single schedule is confusing and
should be avoided. Standard tickmarks for an entire section of
workpapers is acceptable as long as tickmark explanations are
readily available. Tickmarks should be recorded in red.

(5) Referencing and Cross-Referencing – Complete and accurate

referencing and cross-referencing in the workpaper file is an
essential component of completing the work of the audit.
Generally, reference should be made to and from supporting or
related papers or documents even if there is only a small
possibility that the reference is needed. Referencing should be
clear and precise to facilitate ease of review. Referencing and
cross-referencing should be recorded in red. At minimum the
following items should be referenced:

• Audit program or plan to workpapers

• Workpapers to/from other workpapers
• Lead workpapers to/from supporting workpapers
• Within a workpaper
• Workpapers to/from audit finding sheets
• Finding sheets to/from supporting documentation
showing exception

B2.11 Audit Findings - May involve deficiencies in internal control, fraud, illegal
acts, non-compliance with established Board of Education policies and
procedures or Federal and State requirements, violation of terms of
contracts and/or grants, or abuse. Typically findings emerge as the result of

27
 comparison of a particular policy, procedure, law, grant and/or contract
term to a particular related action performed. Findings should be clearly
written and adequately documented in the workpapers. Each finding must
be provable. To that extent, it is not important what an auditor believes.
The important thing is that the facts stated in the finding can be proven.
Auditor’s beliefs and/or “hearsay” of others will not be carried to the audit
report without proper supporting documentation.

Findings are prepared using the “Yellow Book” format included in the
Government Auditing Standards. This format requires each finding to
include the following components:

a.) Criteria – the laws, regulations, policies, procedures, contracts, grant

agreements, standards, measures, sound business practices, and
benchmarks against which performance is compared and evaluated
b.) Condition – the situation that exists as a result of not complying with
the criteria
c.) Cause – the reason for the difference between the criteria and
condition. Common factors include poorly designed policies and
procedures and incomplete and/or incorrect implementation.
d.) Effect – the impact of the difference on operations, or the risk or
exposure created by the difference
e.) Recommendations – steps that should be taken to eliminate the cause
and/or remove or reduce the impact or risk

B2.12 Exit Conference – It is the policy of Internal Audit to communicate

exceptions with the auditee throughout the audit. Also, audit findings and
proposed recommendations are formally reviewed with management
personnel responsible for the activities audited prior to releasing the final
audit report (in case of school audits) and draft audit report for operational
audits. Generally, management will be provided with copies of audit
finding sheets (see attachment 5) for discussion purposes before issuance
of the final report. In the case of student activity fund audits, the principal,
bookkeeper and auditor in charge will sign the finding sheet following the
discussion of each reportable condition. The auditor in charge and auditee
management will sign finding sheets for operational audits. Management’s
signature on the finding sheets signify that the findings have been
discussed, not necessarily management’s concurrence or lack of
concurrence. Conducting the exit conference provides the auditor an
opportunity to ensure that there was no misinterpretation of audited data
and conclusions are valid. Although disagreements may occur and may not
be resolved, modifications should be made when deemed necessary. The
exit conference should be scheduled at a convenient time immediately
following the completion of fieldwork. Note: An audit exit conference
may not be held when the audit engagement is a special or fraud
investigation. In this case the audit report would be issued directly to
management personnel with a “need to know” as determined by the Internal
Audit Director.

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B2.13 Supervisory Review – Auditing standards require that audit supervisors
must properly supervise audit staff. Audit supervision involves providing
sufficient guidance and direction to staff assigned to the audit to address
audit objectives and follow applicable standards, while staying informed
about significant issues encountered, reviewing the work performed,
and providing effective on-the-job training. The nature and extent of the
supervision of staff and the review of audit work may vary depending on
the size of the audit engagement, significance of the work and experience
of the staff. However, all workpapers should be reviewed by the audit
supervisor or Director, who should prepare review notes. The notes
represent the reviewer’s critical comments on the adequate completion of
audit work. The reviewer should evidence review by initialing and dating
each workpaper, usually near the preparer’s initials.

It is essential that workpapers are reviewed as soon as possible after the

audit is completed. In reviewing the workpapers, it is usually necessary to
prepare review notes as a list of those items which, in the reviewer’s
opinion, i.) Require additional work or documentation; ii.) Need
clarification; iii) Will serve as a teaching device for the auditor; or iv.)
Require some follow-up action. The review notes should be given to the
auditor-in-charge along with the workpapers for appropriate action.

The auditor should promptly “clear” the review notes and indicate clearly
what was done to clear them in the “Auditor’s Comments” section next to
each note. (see attachment 6.4) The auditor should also indicate the date
that each comment was cleared. The working papers must be reviewed and
review notes cleared prior to releasing the Audit Report. Once the
supervisor is satisfied that the review notes are cleared, the review notes
worksheet may be discarded.

B2.14 Quality Control / Monitoring - Staff auditors are required to submit

quarterly projection of schools audits in accordance with the annual audit
plan and the risk based approach (attachment 6.15) designed by Internal
Audit. Internal Audit management also identifies operational audits
presented in the annual audit plan through the risk based approach.
Operational audits are assigned to staff auditors at specified times during
the school year. Staff members provide management with quarterly status
of the progress of audits performed. Staff auditors’ quarterly progress
reports are compiled and included in Internal Audits Quarterly reports to
the Board of Directors. Any deviation from the previous quarter’s
projection is explained in the current month’s status reports.

The staff auditors are required to document the audit process in the form of
audit workpapers for each engagement accurately and precisely in
accordance with Generally Accepted Government Auditing Standards.

29
 Workpapers and audit reports are required to be reviewed by the Internal
Audit Supervisor to ensure professional standards and legal regulatory
requirements have been followed and to ensure compliance quality control
policies and procedures. A final review of all reports is performed by the
Director of the department, except where the Internal Audit Supervisor is
authorized to issue a report in the Director’s absence. Reports are submitted
to the Director electronically for review.

B2.15 Threats – If a threat to independence is identified subsequent to the

issuance of the audit report, staff auditors must notify management and are
required to evaluate the threat and its impact on the previously completed
audit. If a determination is made that the audit results could have been
different if the auditor had previous knowledge of the threat, the threat
should be communicated to the persons initially included on the transmittal
form. The report should be retracted and consideration should be made and
to whether any additional audit steps are performed.

As a precaution, staff auditors are required to notify management of any

risk of threat to their assigned engagements.

IA has a group of Property Control Specialists who perform Public

Property Assessments (inventory) at schools and offices audited by Internal
Auditors. The property assessment process is evaluated annually to ensure
that no significant threat to independence exists. (Refer to attachment 6.16
for a copy of the annual assessment performed).

B3. Audit Report

The purpose of the audit report is to provide the only acceptable means of
communicating all of the auditor’s work to management and key personnel within
the BOE. Nothing else produced by the auditor is normally seen by anyone outside
the Internal Audit Department and therefore, the audit report must concisely
present the total essence of the audit effort. A well-developed audit report is
essential to maintain a reputation for reliability and to justify a high level of
confidence by management in the findings.

The report must be clear and concise. Although some subjects may require
detailed explanations, every effort must be made to organize the facts and draw
meaningful conclusions in the fewest possible words without diluting the meaning
or significance of the report. The report should be clear enough that someone
independent of the audit can understand it. The report must also be accurate; i.e.
every statement, figure, or reference must be based on evidence documented in the
workpapers. All auditors are expected to use acceptable grammar, sentence
structure and context. The audit report must also be written in a neutral tone. The
wording selected should be calm, objective, thoughtful and dispassionate.
Wording with negative connotations should be avoided.

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The use of individuals’ names, and other specific identifying information should
also be avoided wherever possible within the context of the report. However, this
information may be provided in the addendum.

Audit reports should also be prepared soon after the exit conference has been
conducted. The impact of the report will be weakened if it is not received
promptly. Promptness should not conflict with adequate preparation – both are
important. Properly written audit findings facilitate extraction of information for
the audit report.

B3.1 Audit Report Organization – the audit report package contains two
elements – a transmittal memorandum and the auditor’s report described
below. An addendum should also be attached naming individuals
referenced in the audit report.

a.) The Transmittal Memorandum is essentially a cover letter addressed

to responsible management personnel informing them that the audit was
completed. The memo should be addressed to the Director or Principal
of the area audited and the Executive level staff person as well as that
staff person’s Director. School audits are typically addressed to the
respective Instructional Director and the Principal. It is addressed from
the Director of Internal Audit. The body of the memo should contain the
name of the audited entity as well as the scope of activities audited. It
should also indicate whether deficiencies were noted and request a
response to the audit in the form of a Management Action Plan.
Typically school audits require a response/action plan be submitted
within 30 days of the date of the memorandum. Other audits may require
a 15 day response especially when missing funds are identified. The
memo should include the date that it was prepared. The Board of
Education Chair and CEO should be copied on the memo. Other staff
may also be copied depending on the nature of the audit.

b.) The Audit Report – must provide a thorough explanation of the work
completed. Each report should contain a summary/background,
objective, scope, findings and recommendations, and opinion.

• Summary/Background – should contain sufficient information

to provide the reader with an adequate understanding of the
audited activity and purpose of the audit. There should be
relevant explanatory information about the activities reviewed.
This section should be kept brief, clear and complete.
• Audit Objective - states what the report is to accomplish. It
often involves identifying the audit subject and the aspect of
performance involved. All audit objectives documented in the
audit plan should be specifically stated here.
• Audit Scope – this section should contain a description of the
auditor’s examination and the time period covered by the audit.
It should include calendar dates of the period audited,

31
 descriptions of samples and methods used for audit testing and
other specific information that is appropriate. A brief
description of any exclusion should also be included to prevent
any misunderstanding on the reader’s part.
• Findings and Recommendations – this section provides the
details of findings included on the audit finding sheets. Well-
developed findings must contain the condition, criteria, cause,
effect and recommendation. A separate section addressing the
status of deficiencies noted in prior audits should also be
included as audit follow-up.
• Opinion – provides a statement of conclusion about the subject
matter audited. It usually will contain some statement regarding
whether internal controls require strengthening based on audit
results.

B3.2 Audit Report Review – Following the initial supervisory review of the
audit report and workpapers a second independent review will be done
prior to distribution. At a minimum this review should consist of
determining whether the reviewer can gain an understanding of the audit
results. Also, the reviewer should determine that the memorandum is
properly addressed, the report is grammatically correct and meets
department standards and the report is mathematically correct. This review
is usually done by the Internal Audit Director prior to issuing the report.

B3.3 Audit Report Filing – A “file copy” of the report must be maintained and
filed with the associated workpapers within the “Audit Workpapers” folder
on the G-share. A second “Chron copy” (hard copy) should be filed
chronologically in a separate folder. All files must be maintained in
accordance with the Board of Education’s retention policy of seven (7)
years including the current year.

B3.4 Audit Report Numbering –Reports for audits that are not student activity
funds are assigned numbers by the Audit Director. Report numbers are
assigned by year, type and number: Example: R16-001 or S16-001. The
R identifies an audit engagement included on our audit plan or “regular.”
The “S” indicates “special” audits which are not a part of our regularly
scheduled audits as indicated on the plan, but were requested due to
fraudulent activity, a particular concern, etc. The number “001” indicates
the first audit for the year and subsequent audits will be numbered
consecutively.

B3.5 Audit Report Referencing – Audit findings and recommendations which

are the core of the audit report are adequately supported, referenced and
signed by the auditee. These findings are maintained in a separate section
of the audit workpapers.

B3.6 Management Response – Written responses to audit reports are typically

due within 15 – 30 days depending on the type of audit. The audit response

32
 in the form of an action plan is due within 30 days of the date on the audit
report memorandum for student activity fund audits. An acceptable
response should provide a specific corrective action that will be taken to
address each audit finding and recommendation in the report. The response
should also clearly state agreement or disagreement with the finding being
addressed. The response must be prepared by the person to whom the
audit report memorandum was addressed and should also contain their
original signature. The response is required to be documented on the audit
response template (attachment 6.1) and provided to the Business Analyst
in Microsoft Word within the required timeframe. Also, the signed action
plan may be submitted electronically in pdf format.

If the response provided by management is not adequate, Internal Audit

will provide an audit clarification. At this point no further response is
required from management.

B3.7 Internal Audit Report Tracking - Audit reports issued are recorded on an
Internal Audit tracking document. The purpose of this system is to monitor
management responses and determine that they have been returned timely
and that each finding was properly addressed. Executive level staff is
notified when audit responses are not received.

SECTION C - AUDIT PROCEDURES AND TECHNIQUES FOR SPECIAL

INVESTIGATION AUDITS

C1. Introduction

The Internal Audit Department is responsible for conducting all investigations

arising from notification, either by an employee, student, parent, CEO or other
interested individuals of a suspected irregularity or misappropriation. An
investigation is a special purpose type of audit. Special Investigation audits
include PGCPS Hotline Investigations. Audit procedures should be conducted
with applicable standards set forth by professional associations representing
internal auditors such as the Institute of Internal Auditors (IIA) and Association
for Certified Fraud Examiners. Auditors should also be mindful of Generally
Accepted Government Auditing Standards.

C2. Application of Investigation Standards

Investigation standards shall apply under the following circumstances:

• The primary purpose is to gather, develop, examine and/or evaluate evidence to

determine if there has been an improper act committed, and
• Allegations of an improper act which carry with them the possibility of legal
action, whether in the form of hearings, litigation or criminal proceedings. Any
illegal costs may be referred to the Maryland States Attorney’s Office for further
review or prosecution.

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C3. Identification of Circumstances Requiring Special Investigations

Matters related to fraud that are governed by applicable audit standards; i.e.
IIA or GAGAS, include the following:
• An examination for the purpose of improvement of controls involved in an
allegation of an improper act,
• Auditing for fraud in the absence of an allegation, or reasonable suspicion, and
(Student Activity Fund and Operational audits should include steps to help assess
and identify fraud)
• Developing fraud prevention or detection programs. While the specific reason for
initiating an investigation will vary, there must be an adequate basis for suspecting
a possible improper act. Matters referred to Internal Audit for investigations that
do not have an adequate basis for suspecting a possible improper act may be
appropriately reviewed as an advisory service to management. When these matters
result from the exercise of management judgment, they are rarely susceptible to
investigation and often not appropriate for review as a Special Investigation audit.
Some example of these matters may be “fairness” of compensation, adequacy of
supervision, co-worker relationships, etc. Activities that will usually be classified
as Special Investigations include but are not limited to the following:

• Frauds/Embezzlement – involves missing or stolen cash receipts, cash

larceny, cash swapping, kickbacks, bribery, etc.
• Improper Use of PGCPS Resources – unauthorized and/or inappropriate
purchases using PGCPS resources; falsely claiming entitlement to an undue
benefit; unauthorized and/or inappropriate use of PGCPS name, logo, tax
identification or exempt status; and/or inappropriate use of PGCPS owned
vehicles, computers, or other assets
• Payroll Time/Charge Abuse – receipt of pay for time not worked; employee
receipt of payroll fringe benefits for themselves or someone falsely reported
as a relative; non-recording of vacation and sick-time used; ghost
employees, etc.
• Misappropriation of Assets – misappropriation of equipment inventory,
supply inventory, computers, or laptops
• Fraudulent Disbursement of Cash – fraudulent disbursement of expense
and travel reimbursements, fictitious refunds, billing schemes, or
establishment of outside fictitious vendors or companies.

C4. Audit Techniques for Special Investigative Audits

Policies and procedures applicable to the performance of audit techniques used to

conduct Special Investigative (SI) Audits differ from Student Activity Fund (SAF)
and Operational Audits. Some of the techniques performed routinely for SAF and
operational audits, but excluded for SI audits include but are not limited to the
following:

34
 • 4.1 Planning Budget - A planning budget as described in B2.3 is not done
for special investigation audits. There is normally minimal advance
notification of the need to perform SI audits. There is also a requirement
for reporting of audit results as promptly as possible. This makes it not
prudent to develop a planning budget as required of more routine audits that
are included on the audit planning schedule.
• 4.2 Entrance Letter – Special Investigation audits are not preceded by
issuance of an Entrance Letter as described in B.24. Due to the necessity
for maintaining confidentiality and audit timing, this process is not
conducted.
• 4.3 Entrance Conference – An Entrance Conference as described in B2.6 is
typically not conducted for SI audits for purposes of maintaining
confidentiality. Depending on the nature of the circumstances investigated,
staff with a “need to know” may be alerted especially in cases involving
safety and security.
• 4.4 Audit Program – An Audit Program will not be developed containing
the audit steps to be conducted during the investigation as described in
B2.8. Most SI audits are not routine engagements. Audit timing and
necessity to maintain confidentiality over audit processes performed to
complete the investigation make it not prudent to perform this procedure
for SI audits.
• 4.5 Exit Conference – An Exit Conference as described in B2.12 may not
be conducted for SI audits. Due to the nature of the results of the
investigation only those determined to have a “need to know” may be
informed once the investigation report is completed. Usually
communication of results will only be in the form of the investigation
report.
• 4.6 Audit Report – An audit report as described in B3 is not always done
for every special investigation conducted. The format for communication
of results varies dependent on the circumstances. A SI report addressed
only to those deemed by the Audit Director to have a “need to know” is
done for hotline allegations that are deemed to be credible.

C5. PGCPS Compliance Hotline

The Board of Education has implemented a Compliance Hotline program that

provides a toll-free phone number to a third party contractor that can be used for
anonymous calls from employees or others when they believe that a fraud,
misappropriation or similar workplace incident has occurred. Currently PGCPS
uses Global Compliance as the contractor for the hotline services. The phone
number to call in a report is 1-866-646-2512. Confidential reports may also be
made online via a web link on the PGCPS website.
https://pgcps.alertline.com/gcs/welcome. Employees and others who call the
hotline may choose to remain anonymous. If anonymity is requested, no

35
 attempt will be made to identify the caller. Information provided must be
treated as confidential and privileged to the extent permitted by applicable law.

Hotline Investigations must be undertaken in a confidential manner. Reports and

correspondence will only be distributed to the Investigator, CEO or BOE upon
authorization of the Director of Internal Audit. The Director of Internal Audit and
Investigative Auditor are responsible for ensuring confidentiality over hotline
documents to maintain the integrity of the hotline program.

The hotline vendor interviewer has the following responsibilities once they answer
the call:

• Information provided is confidential.

• PGCPS has a bylaw that protects employees from retaliation for disclosing what
the employee believes evidences certain unlawful, wasteful, or hazardous practices.
• Caller may leave name and number in case additional information is needed. If
caller wants to remain anonymous, an identification number will be provided at the
end of the interview.
• Ask caller to provide as much detail as possible to explain the activity that is
taking place including department/subject involved; description of activity; dates,
times and places; identification of corroborating evidence, names of any credible
witnesses, etc.
• Assign a number (sequentially) to each caller and provide that number to them.
Ask caller to call back within 10 business days in case Internal Audit needs
additional information after the preliminary investigation. Ask caller if they would
like a report on results of the investigation.

The hotline investigator has the following responsibilities once they are notified of
the hotline call:

● Record the call on the hotline database

● Discuss hotline information received with the Director of Internal Audit
● Perform investigation, if warranted
● Provide periodic reports to the BOE
● Issue letter or report once investigation is finalized
● Follow-up on completion of any required remedial actions
● File investigation documentation sequentially, in a locked file drawer in
the Investigative Auditor’s office.

C6. Evidence Gathering

The following guidelines should be followed for conducting investigations:

a.) Working Papers – Special investigation work papers should follow the
standards that require documentation of relevant information to support the

36
 conclusions and audit engagement results. Care should be taken to gather
evidence so as not to compromise its admissibility as evidence and with
consideration for the potential of its use in a legal action, whether in the form
of hearings, litigation or criminal proceedings. Often in the case of a
deposition or trial, the auditor that gathered the evidence is personally
responsible for giving testimony as to the means and authority for gathering
the evidence. Certain documentation commonly found in work paper files will
not be present for special investigation audits.

b.) Interviews – Interviews are conducted for the purpose of gathering information
pertinent to the investigation. Two Internal Audit staff members should be
present in all interviews of material witnesses and there should be a
documented record of the interview. Interview documentation should include
the substance of the interview, names of the interviewer and interviewee, the
time and date of the interview.

c.) Witness Statements – Statements prepared by witnesses should be signed in

such a way to acknowledge authorship. Written statements should be prepared
in ink or typewritten. All statements must be maintained on file as prepared
and must not be altered in any way.

d.) Investigation Audit Workpaper Reviews – Investigation Audit workpapers will

be reviewed in the same manner as noted in Section B2.13. All workpapers
will be reviewed by the Audit Director or Supervisory staff to ensure that there
is sufficient evidence to support conclusions and to satisfy the objectives of the
Investigation.

Involvement of Outside Agencies – If it appears that a crime may have been committed,
Security Services, the Office of General Counsel and law enforcement officials may be
consulted to determine appropriate action regarding the investigation and legal
proceedings. Investigative Auditors may lend assistance to the extent their expertise is
needed, i.e. analysis of accounting records. Matters regarding suspected abuse of students
are reported to Security Services, Office of General Counsel and Child Protective Services
for investigation and follow-up.

C7. Investigation Audit Reporting

A Special Investigation Audit Report is prepared whenever it is determined that a

loss has been sustained or a significant weakness in internal control is identified.
A report will only be done for PGCPS Hotline calls when the allegations are
deemed as potentially credible by the Director of Internal Audit. The Audit Report
will address the allegations, findings and recommendations for corrective action.
Special Investigation audits should include elements such as the following:

• Background – statement of how allegations were reported to IA

• Allegations – specific allegations investigated
• Objectives – statement of what the investigation intended to accomplish.

37
 • Investigative activities – provides the scope of investigation
• Key Determinations – statement of facts gathered relative to allegations
made
• Conclusion – statement of whether allegations could be substantiated based
on key determinations
• Recommendations – proposed action to be taken by management as a result
of investigation results

SECTION D: AUDIT PROCEDURES AND TECHNIQUES FOR INFORMATION

TECHNOLOGY AUDITS

D1. Introduction

Information Technology (IT) audits are performed by the IT Auditor under the
direction of the Internal Audit Director. Most of these audits will be those that are
included in the annual audit plan. IT audits address a variety of confidential
matters including: audits of schools and departments for the purpose of
determining the adequacy of IT systems controls, assessing the degree of
accomplishment of financial and IT objectives, compliance with accounting,
auditing and PGCPS established policies and procedures, etc. These audits are
conducted in accordance with applicable standards set forth by professional
associations representing internal auditors such as the Institute of Internal Auditors
(IIA), and the Information Systems Audit and Control Association (ISACA). The
auditor should also be mindful of Generally Accepted Government Auditing
Standards.

D2. Identification of Audit Areas

Selection of planned specific IT Audit coverage will be evaluated and determined

based on the annual risk assessment process as described in section B1. This
assessment encompasses including IT audits for areas determined to be high risk
based upon the same criteria and weighting used in identifying operational audits
to be audited. Consideration is given to PGCPS financial and operational
technology components related to schools, administration, inter/intranet, and
regulatory risks. Audits of IT processes may also be conducted as a portion of a
special investigative or operational audit.

D3. Auditing Procedures

Generally, IT audits will be conducted using the same procedures indentified in

Section B2. In most cases supervisory review of these audits will be conducted by
the Internal Audit Director.

D4. Audit Reports

38
 Guidance for preparing IT audit reports may be found in Section B3. Reporting on
IT operations may also be encompassed within an audit report instead of separated
when the IT auditor has only reviewed a related component for an operational or
investigative audit.

SECTION E - AUDIT PROCEDURES AND TECHNIQUES FOR PROPERTY

AUDITS

E1. Introduction

The purpose of a property audit is to ensure that PGCPS property is accounted for
and that inventory control procedures are adequate and that they are being adhered
to. Audits are conducted where physical inventories are performed and that data is
compared to reports retrieved from the Oracle database. Discrepancies are
researched in an effort to locate any missing equipment. The Property Audit team
is available to inform and train PGCPS staff on the use of inventory control
forms and procedures.

E2. Responsibilities

All PGCPS staff that use PGCPS equipment is responsible for safeguarding that
equipment. They are responsible for completing necessary inventory documents
and for securing equipment. The Public Property Control Manual, revised April
2016, provides guidance to PGCPS staff regarding use, transfer and disposal of
equipment. This manual was developed as support to Board Policy 3260 Sale and
Disposal of Books, Equipment and Supplies which states, “All books, equipment,
supplies, furniture or other tangible units procured or donated to the Public School
System from any source shall become the property of the Board of Education of
Prince George’s County and shall not be altered, defaced, sold or disposed of
except as provided for by the Chief Executive Officer.” The Property Audit Team
works closely with the accounting office to ensure reconciliation of PGCPS’
inventory. Accounting is responsible for updating asset data into the Oracle and
the Asset Management database. These updates may include adding or
correcting serial numbers, correcting descriptions of items, changing the locations
of equipment or retiring stolen or damaged equipment from the Oracle database.

E3. Identification of Audit Areas

All PGCPS locations that house PGCPS equipment including schools and offices
are subject to periodic audits. Audit sites are selected in a variety of ways to
include administrative changes, new facilities, special requests and on a cycle of
every 3 – 5 years.

39
E4. Audit Planning

When planning a property audit, a memo is sent to the principal/supervisor of the

site to be audited and to the responsible Instructional Director to inform them that
an audit has been scheduled and to advise for preparation for the audit. A ‘Pre-
Audit Computer Report’ listing the types of equipment at the site to be audited is
created using Discoverer and the Asset Management System for review prior to the
site visit.

E5. Audit Procedures

When conducting audits, a physical walk through of the site is done to record serial
numbers and or bar codes from the equipment using a hand-held scanner or a
digital recorder. The location and condition of the equipment is also noted. Upon
returning to the Internal Audit office, this information is transcribed and compared
to the aforementioned Discoverer and or Asset Management report when the
digital recorder is used. Transactions captured with hand-held scanners are
uploaded into an excel spreadsheet and compared to the reports previously
downloaded from the Asset Management and Discoverer databases. Management
and grant codes are reviewed and verified to ensure that equipment is being used
according to grant specifications. If there are items on the pre-audit report that
were not seen during the audit, a list is sent to the principal and the responsible
Instructional Director for that cluster along with a memo giving suggestions as to
how they might locate these items. Serial numbers of the missing equipment are
also compared with the Computrace database in an effort to assist in locating the
equipment. The sites are given two weeks to respond. At that time, a return visit
to the site is scheduled to physically verify items that have been located and to
obtain supporting documentation to support the whereabouts of still missing items.

E6. Audit Reports

Once updates have been made in Oracle and Asset Management according to
Internal Audit findings, a final report is issued to the principal or department heads.
The Director of Business Operations, Chief Financial Officer and Chief
Information Officer are informed of the results of the audit via a memorandum.
Copies of all memos are stored electronically on the G-drive.

SECTION F - ANCILLARY ACTIVITIES

Internal Audit provides support to PGCPS through a variety of activities. These activities
include:

• Professional development training on internal controls

• Advisory services on Best Practices
• Participation with management in oversight of policies and procedures
• Volunteer activities to support students
• Assistance and oversight on external audit activities

40
 • Support to Board of Education Members, Chief Executive Officer and Executive
Team
• Participation with professional associations
• Software Implementation

The PGCPS Internal Audit Manual was:

Issued January, 1998

Revised May, 2012
Revised July, 2016
Revised January, 2017

41
 ATTACHMENT 1

PRINCE GEORGE’S COUNTY PUBLIC SCHOOLS

Board of Education
Upper Marlboro, Maryland

Policy No.
8373
BOARD OF EDUCATION POLICY
INTERNAL BOARD OPERATIONS

Office of Internal Audit

Purpose

The Board of Education of Prince George’s County has established the Office of Internal Audit
as an independent office that reports directly to the Board. The primary objective of the Office of
Internal Audit is to assist the Board of Education in effectively discharging its duties and
responsibilities for oversight of the management of the Prince George’s County Public Schools
(PGCPS). To accomplish this objective, the Office of Internal Audit shall complete audits of
PGCPS and furnish the Board of Education with analyses, recommendations, counsel, and
information concerning the activities audited or reviewed. The Office of Internal Audit shall also
facilitate and support any audit processes and assist external auditors to the extent required by
the Board of Education and/or federal, state or local authorities. In addition, the Office of
Internal Audit may conduct special audits requested by the Board of Education and/or the Chief
Executive Officer, as authorized by the Board of Education.

Organization

A. The authority and responsibilities of the Office of Internal Audit shall be established by the
Board of Education. The Director of Internal Audit reports directly to the Board of
Education and has access to the Board Chair, Board Vice-Chair and the Chief Executive
Officer. To ensure independence and objectivity, Board approval is required for the hiring,
removal or replacement of the Director of Internal Audit. The Board of Education shall be
responsible for annually evaluating the Director of Internal Audit. All employees in the
Office of Internal Audit are responsible for assisting and acting in a confidential capacity
to the Board of Education and the Chief Executive Officer.

B. The Office of Internal Audit shall have the following authority:

1. Complete access to all PGCPS schools, records, including personnel records,

documents and files in any form;

2. Authority to request assistance and receive full cooperation from appropriate PGCPS
personnel in obtaining the information listed in Item 1 above;

42
 3. Authority to interview PGCPS staff and employees to obtain information pursuant to
audit investigations; and

4. Access and inspection rights to all PGCPS assets, property and facilities owned,
leased or borrowed by PGCPS and the authority to request assistance from
appropriate PGCPS personnel in locating assets, property and facilities.

C. The Office of Internal Audit shall maintain its independence and objectivity at all times
and avoid conflicts of interest. In performance of duties, no staff member of the Office of
Internal Audit shall have any direct responsibility or authority over any of the activities
audited. The Office of Internal Audit shall not draft or implement procedures, prepare
records, or engage in any other activity that it would normally review and evaluate, which
could be construed as compromising its independence and objectivity. However, such
objectivity shall not be considered as compromised when the Office of Internal Audit
recommends standards for internal controls, recommendations to modify or change
existing policies, administrative procedures, labor agreement provisions, and/or practices
and procedures.

Scope of Work

A. The Office of Internal Audit shall evaluate the reliability and integrity of financial and
operational information and the means used to identify, measure, classify, and report such
information.

B. The Office of Internal Audit shall determine proper compliance by PGCPS staff with
Board Policies, Administrative Procedures, applicable laws and regulations, and grant(s)
requirements, where failure to comply would have significant impact on PGCPS.

C. The Office of Internal Audit may evaluate the security and accountability over PGCPS
assets and resources, and as appropriate, verify the existence of such assets and resources.

D. The Office of Internal Audit shall recommend improvements to PGCPS operations,

programs, activities, and information systems to improve management, economy and
efficiency in operations.

E. The Office of Internal Audit shall conduct special reviews and investigations as directed
by the Board of Education and may seek assistance from legal counsel as designated by
the Board.

F. The Office of Internal Audit shall conduct investigations of reported fraud, waste and
abuse in response to complaints received via the hotline and other methods of
communication.

G. The Office of Internal Audit shall provide support to the Board of Education. This
support includes analysis of Board Office appropriations, assistance with review during
the annual budget development process, and other pertinent requests from the Board
Chair.

43
Reporting

A. The Office of Internal Audit shall prepare draft audit reports and provide to appropriate
PGCPS management following the conclusion of each operational audit. Management
shall be required to respond to the findings and recommendations included in the draft
audit report within 15 to 30 business days as determined by the Director of Internal
Audit. The response should include actions management intends to implement to properly
address each audit finding and recommendation, along with a time table to complete such
actions. A final audit report shall be prepared and issued by the Director of Internal
Audit that will address management’s responses. Internal Audit will inform Executive
staff and the Chief Executive Officer when management does not provide a response.
Copies of the final audit report shall be provided to the Board of Education, Chief
Executive Officer, and Executive and management staff as appropriate. Student activity
fund reports issued with management responses attached are considered final reports.
The Office of Internal Audit shall conduct follow-up audits to ensure that management
implements corrective actions.

B. The Office of Internal Audit shall provide an annual summary report of significant audit
findings and recommendations for each school year on or by September 30. The report
shall also include the audit plan for the subsequent school year. The Office of Internal
Audit also provides quarterly reports of its activities to the Board of Education.

C. Beginning School Year 2015/2016, Internal Audit shall be audited by an independent

external audit and thereafter shall be audited every three (3) years.

Policy Adopted
6/25/15

44
 ATTACHMENT 2
Board Office

Chief of Strategic & External

Affairs Board of Education Internal Audit
Board Liaison
Business & Non-Profit Partnerships Outside Counsel
CEO Initiatives
Family & Community Engagement

Strategy, Planning & Communications

Performance
Enterprise Program Mgmt. Legal Services
Strategic Resource Planning Chief Executive Appeals
Chief of Staff Court Liaison
Chief of School Health, Policy, Officer General Counsel

Services & Innovation

Health Services Ombudsman

Diversity Officer
Interpreting & Translations Services

Charter & Contract

School Support

Continuous Systemic
Pupil Accounting & Chief Operating Deputy Superintendent Deputy Improvement
School Boundaries Officer for Teaching & Learning Superintendent
State & Federal Programs

Talent Development

BUSINESS
SUPPORTING Special Education & AREA I School AREA II School Area III School HUMAN RESOURCES
INFORMATION MANAGEMENT
TECHNOLOGY SERVICES Student Services Performance Performance Performance Chief Human
Chief of Supporting SERVICES
Chief Information Officer Chief Financial Associate Superintendent Associate Superintendent Associate Superintendent Associate Superintendent Resources Officer
Services
Officer
Department of Arts
Enterprise Integration Instructional Instructional Instructional
Benefits Department of Employee &
Systems Building Services Directors Directors Directors
Administration Special Education Labor Relations
Schools Schools Interscholastic
Printing
Capital Programs Department of Department of Athletics
Services & Budget & Employee
Copier Program Management Curriculum & Student Services
Instruction Alternative Performance &
Food & Nutrition Services Programs Evaluation
Technology Services
Applications Business Schools
Department of HR Operations &
Security
Operations College & Career
Technology Services Staffing
Readiness &
Operations Innovative Programs
Transportation Payroll
Services HR Strategy &
Technology Department of Workforce Planning
Training Testing, Research
Purchasing & & Evaluation
Technology Supply Services
Support Services
Risk Management
& Worker’s Comp

KEY:
= Financial Reporting

= Continuous Dialogue

Last Updated: 45
 ATTACHMENT 3

Internal Audit Org Chart

Director, Internal Audit

Lead Property Investigative

Business Analyst Auditor IT Auditor
Supervisor Auditor

Property
Property Auditor II
Auditor Auditor II Auditor II Auditor II o Auditor II
Auditor Auditor II

Auditor II

46
 ATTACHMENT 4

Prince George's County Public Schools Workpaper No. B

#REF! Initials Date
Student Activity Fund Audit Prepared By: 0
#REF! Approved By:
Statement of Independence

PURPOSE: To document whether the auditor(s) performing the audit is/are independent with regard to the auditee in both
fact and appearance and can give an unbiased opinion on the financial status of the school's student activity
funds.

SCOPE: The auditors personal and professional relationships to the school as a whole and to individuals at the school.

SOURCE: Generally Accepted Governmental Auditing Standards and Institute of Internal Auditors IPPF No. 1120

CONCLUSION: The auditor(s) performing the audit is/are independent with regard to the auditee in both fact and appearance
and has given an unbiased opinion on the financial status of the school's student activity funds.

STATEMENT OF INDEPENDENCE

This is to certify that I, (Name of Auditor), am an independent auditor within the meaning of audit standards
applicable to and recommended for use by government auditorsand internal auditors . In respect to all matters
pertaining to the audit work of (SCHOOL), I am free from personal and external impairments that might affect my
ability to perform the examination and report my findings on an impartial basis.

I certify the following regarding the audit of __________ school for the audit period **** to ***.

1. I am not aware of any threats (e.g. familarity threat) that would impair my independence and might
cause me to limit th e extent of the inquiry, limit disclosure, or weaken or slant findings in any way (as
defined in GAS 3.08; 3.13 - 3.15).

2. I am not aware of any possible impairment to my independence, of mind or in appearance, in conducting

the audit.

3. I have current knowledge of Government Auditing Standards.

4. I am impartial, unbiased and do not have any conflict of interest regarding (School) (as defined in IIA,
IPPF 1120)

Signature:

Date:

…………………………………………………………………………………………………………………………………..

47
 ATTACHMENT 5
Student Activity Funds
Finding Sheet
For the Period Ended February 29, 2016

2016.06 Fundraiser Forms Not Completed

Condition:
Fundraiser Request and Authorization forms were not completed and/or approved for 16
fundraisers in the audit period. Fundraiser Completion Report forms were not completed and/or
approved for 16 fundraisers in the audit period.

Criteria:
Administrative Procedure 5135.1, Fund Raising, states that Fund Raiser Request and
Authorization forms must be completed and approved for fundraisers not sponsored by the
principal. In addition, Fundraiser Completion Report forms should be completed for all
fundraising activities.

Cause:
The bookkeeper and principal have not worked together to create internal controls for fundraiser

e
forms. The bookkeeper distributes empty fundraiser forms to sponsors who inform her that they
will be conducting fundraisers. However, the principal and bookkeeper do not review financial
records to ensure that all fundraisers have been authorized prior to approving receipts and
pl
disbursements. In addition, the principal and bookkeeper do not ensure all completion reports
are turned in and approved prior to the end of the school year.
m
Effect:
Failure to complete fundraiser forms constitutes non-compliance with board of education
policies and procedures. In addition, it decreases transparency of fundraising activities and the
associated profits to interested parents and community members.
Sa

Recommendation
The principal and bookkeeper should collaboratively develop and document internal controls to
ensure all fundraisers are properly approved.

Auditor___________________________________ Date ___________________

Principal__________________________________ Date ___________________

Bookkeeper _______________________________ Date ___________________

By signing this form, you agree that the findings for the audit period 12/1/14-2/29/16, which
is the basis for the audit report, have been discussed with you in detail. Copies of the
findings have been provided to the school for their records.
 ATTACHMENT 6

Internal Audit Program for

Student Activity Funds (SAF)
School Name: _________________________ Audit Period: __________________

Bank Authorized
Account
Account Description
Number (last Check
4 digits)
Signers

e
Audit Procedures for Consideration

FINANCIAL STATEMENT ASSERTIONS

pl Performed by
Workpaper
Index
m
E/O Existence or occurrence. V/A Valuation or allocation.
C Completeness. P/D Presentation and disclosure.
R/O Rights and obligations.

FINANCIAL STATEMENT AUDIT OBJECTIVES

A. Cash exists and is owned by the school (assertions E/O and R/O).
Sa

B. Cash balances reflect a proper cutoff of receipts and disbursements (assertions E/O, C, and
V/A).

C. Cash balances as presented in the accounting records properly reflect all cash and cash items
on hand, in transit, or on deposit with third parties (assertions E/O, C, and P/D).

D. Cash balances are properly classified in the financial statements, and any restrictions on the
availability of funds are properly reported (assertions R/O and P/D).

COMPLIANCE AUDIT OBJECTIVES

A. Schools are managing their student activity in accordance with the policies and procedures
of the Accounting Procedures Manual, Board of Education and management policies and
procedures.

B. Funds are used to provide maximum benefits to students and or educational programs.

C. BOE Assets are adequately safeguarded.

BASIC PROCEDURES
PLANNING

1. Sign a statement of independence documenting that the auditor(s) assigned to the specific
engagement is free from any impairment of independence.

2. Prepare a budget of the hours to be spent on the assignment.

3. Perform fraud inquiries of key personnel responsible for the administration of SAF
(bookkeepers, principals and athletic directors) and BASELP Site Coordinators.

49
 4. Complete or have school staff complete questionnaire for compliance with and design of
controls over general accounting policies, cash receipts and disbursements and school vending
and functioning of clubs and organization for SAF and BASELP.

5. Perform an overall assessment of auditee risk status.

6. Using the Materiality Worksheet, perform the materiality calculation of planning
materiality.

7. Obtain or prepare a Variance Analysis for selected variances identified.

8. Based on the frequency of control activity and preliminary assessment of risk, determine the
sample size for receipts and disbursement to be tested.

FIELDWORK

SOLVENCY DETERMINATION and FINANCIAL STATEMENT REVIEW

1. From the subsequent payments, determine accuracy of the unpaid bills amount included in
the ,QVROYHQF\ Report.

2. Using the unpaid bills determination worksheet and the ,QVROYHQF\Report, determine
the school’s solvency status.

e
3. Review the school’s Year to Date Report to determine proper classification of restricted and
unrestricted account balances, accuracy of transactions reported and completeness of amounts
reported as of the period end-date.

BANK RECONCILIATION
pl
m
Obtain copies (50% or 12 whichever is smaller) of the selected months’ bank reconciliations (include
1st and last month’s reconciliation in the audit period) for the workpapers and perform the following
procedures:

a. Trace the bank balance on the reconciliation to the bank statement

Sa

b. Trace beginning book balance on the 1 st month’s bank reconciliation to the prior period’s
audited book balance

c. Trace the reconciled book balance to the Year To Date Report or Available Funds Report.

d. Test the clerical accuracy of the reconciliation and detail supporting schedules

e. Review the nature and extent of the reconciling items (primarily deposits in transit and
outstanding checks) for reasonableness. For bank accounts with unusual items or a large volume of
reconciling items, perform the following procedures using a cutoff or subsequent month bank
statement:

1. Compare the beginning bank balance on the cutoff bank statement to the bank reconciliation.
Investigate any differences.

2. Trace deposits in transit per the bank reconciliation to deposits in the cutoff bank statement
noting reasonableness of the time period between book and bank recording.
3. Inspect selected canceled checks returned with the cutoff bank statement. Trace checks dated
before the balance sheet date to the list of outstanding checks.
4. Inspect the dates that checks cleared the bank. Investigate any large or unusual outstanding
checks that cleared with the cutoff statement, but took a long time to clear, and/or outstanding checks
that did not clear (still outstanding / stale).

5
 5. Determine the propriety of other reconciling items as deemed necessary.

YEAREND MONETARY TRANSMITTAL ENVELOPES

Open all available MTF envelopes. Select at minimum 30% of MTF envelopes for the last 2 FYs in the
audit period and determine whether submission was performed in accordance with the policies and
procedures of the Accounting Procedures Manual.

COMPLIANCE/INTERNAL CONTROLS OVER CASH RECEIPTS AND DISBURSEMENTS

Using the sample size determined in the planning section of the audit program, perform the following
audit steps:
1. Test the school’s compliance with BOE policies and procedures relevant to funds collected and
disbursed
2. Test the effectiveness of internal controls over funds collected and the cash disbursement process
at the school

CHECKS

Voided Checks: Obtain a print-out of all voided checks for the audit period. Review to ensure that

e
checks were voided in accordance with the requirements of SAM
Cancelled Checks: Using the Internal Audit Sampling Methodology, select a sample of cancelled
checks from the portion of the audit period not reviewed during the Cash Disbursements testing
pl
(periods prior to the last 2 years) and determine whether, a). Checks were signed by 2 signatories b).
Only persons authorized to sign check performed signing function c). checks were written for items or
activities that are allowable by APM.
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BEFORE AND AFTER SCHOOL EXTENDED LEARNING PROGRAM (BASELP)

Receipts / Reports Testing

a. Determine whether program procedures are available to the program coordinator and clerk.
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b. Review selected BASELP receipt books to determine whether funds collected are:

i. Completely documented

ii. All accounted for

c. Select a sample of 8 tuition periods (in last 12 mths) and determine whether funds received

i. Stored securely between collection and deposit

ii. Deposited within 1 day of collection

iii. Recorded on a deposit ticket by the BASELP staff

iv. In agreement with validated deposit ticket (VDT)

v. In agreement with the amount that should be collected per the enrollment report
for the specified period (tuition/registration fee/late payment fee/ late pick-up fee).

d. Determine whether the count provided by the Food and Nutrition snack matches the number
of students enrolled in the program
e. Review the facility’s license to determine:

i. Whether it is current

ii. The program is in compliance with the required student/teacher ratio

51
Students’ Testing
Review a sample (the smaller or 20% or 10 students) of students’ files from the BASELP for the last 6
months of the audit period to determine appropriate approval of admission to / withdrawal from the
BASELP.

REPORTING
SAF:
1. Using the Yellow Book format, document audit findings for the exceptions noted with
recommendations for corrective action.
2. Review audit findings with key school personnel (Bookkeeper and Principal, BASELP
Coordinator, where necessary)
3. Prepare a report to be distributed to management and others deemed appropriate by the
Director of Internal Audit.
4. Follow-up with principal regarding the Management Action Plan. Document a copy in the
workpapers.

CHARTER SCHOOLS:

In accordance with AP 3508, Accounting and Financial Reporting Requirements for Charter Schools ,
ensure the school's compliance by obtaining a copy of the most recent audited financial report.
CONCLUSION

We have performed procedures sufficient to achieve the audit objectives for cash, and the results of

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these procedures are adequately documented in the accompanying workpapers. (If you are unable to
conclude on any objective, prepare a memo documenting your reason.)

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Disclaimer: The audit program has not been designed to examine all aspects of financial management
at the school. Internal audit will undertake further audits e.g. performance reviews and special
investigations to address specific operational or fraud risks.
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Auditor’s signature: ______________________________

Supervisor’s signature: _____________________________

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52
 ATTACHMENT 6.1
AUDITEE ACTION PLAN

Prince George’s County Public Schools

Internal Audit Department
School/Office: _XYZ Elementary
Response Date______________________________________

Concur Status
Findings Recommendations Non-Concur Action Plan Corrective Implemented
Partially Action Date Partially
Concur Implemented
Not Implemented
1. Missing The bookkeeper is required to provide
Funds restitution of the amounts due to the

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school as a result of the differences
totaling $xxxx.xx noted above. Once
this amount is paid to the school, the

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principal must ensure Internal Audit
receives a copy of the MTF and deposit
slip evidencing restitution. This matter
is also referred to Human Resources

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Employee Labor Relations for review
and determination of disciplinary action.

2
Sa
Untimely The bookkeeper must ensure that funds
Deposits are deposited at least weekly and that
funds received are not maintained over
the weekend. The principal must
implement policies and procedures to
ensure the bookkeeper makes timely
deposits.

53
 ATTACHMENT 6.2
Year to Date Report

Ending Date: 6/30/2016

Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 3
307.00 School Patrols $7.36 $0.00 $27.45 $21.00 $0.91
308.00 Employee Sunshine Fund ($47.43) $0.00 $0.00 $47.43 $0.00
309.00 TAG $41.75 $0.00 $0.00 $0.00 $41.75
310.00 Class Accounts $0.00 $0.00 $0.00 $0.00 $0.00
310.10 1st Grade Account $147.78 $40.00 $0.00 $0.00 $187.78
310.20 2nd Grade Account $16.00 $141.00 $20.88 $0.00 $136.12
310.30 3rd Grade Account $244.52 $115.00 $0.00 $0.00 $359.52
310.40 4th Grade Account $91.99 $175.00 $0.00 $0.00 $266.99
310.50 5th Grade Account $52.83 $266.00 $371.83 $0.00 ($53.00)
310.60 6th Grade Account ($75.91) $0.00 $0.00 $75.91 $0.00
310.70 Kindergarten Account $95.89 $10.00 $0.00 $0.00 $105.89
310 sub account totals $573.10 $747.00 $392.71 $75.91 $1,003.30

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320.00 School Store $3.45 $0.00 $0.00 $0.00 $3.45
322.00 SGA $0.00 $0.00 $0.00 $0.00 $0.00
Series 3 total $578.23 $747.00 $420.16 $144.34 $1,049.41
Account
Series 4
402.00 Bookfair-Restricted $0.00
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Beg. Yr. Bal Receipts Disbursements

$0.00 $0.00
Transfers

$0.00
Ending Bal.

$0.00
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405.10 Central Office Sub Teachers $0.00 $0.00 $0.00 $0.00 $0.00
405.20 Central Office Tuition $0.00 $0.00 $0.00 $0.00 $0.00
405 sub account totals $0.00 $0.00 $0.00 $0.00 $0.00
410.00 Charity (outgoing) $0.00 $0.00 $0.00 $0.00 $0.00
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410.10 Direct Relief International $40.00 $0.00 $0.00 $0.00 $40.00

410 sub account totals $40.00 $0.00 $0.00 $0.00 $40.00
415.00 Donations $0.00 $693.00 $644.60 $40.00 $88.40
415.10 Delta Sigma Theta Soriety $200.00 $0.00 $200.00 $0.00 $0.00
415.15 Library Books Donation $46.16 $0.00 $0.00 $0.00 $46.16
415.20 Donation-Parents Day $51.88 $0.00 $0.00 $0.00 $51.88
415.25 Math $28.09 $0.00 $0.00 $0.00 $28.09
415.35 Male/Female Achievement $74.00 $0.00 $85.46 $11.46 $0.00
415.40 Seabrook RecreationCouncil $0.77 $0.00 $0.00 $0.00 $0.77
415 sub account totals $400.90 $693.00 $930.06 $51.46 $215.30
418.00 Hispanic Heritage Day $21.39 $0.00 $0.00 $0.00 $21.39
420.00 Field Trips $2,051.18 $870.00 $800.00 $0.00 $2,121.18
425.10 Core Textbook Fines $235.39 $0.00 $0.00 $0.00 $235.39
425.20 Library Books $387.55 $0.00 $0.00 $0.00 $387.55
425.30 Non-Core Textbooks $0.00 $0.00 $0.00 $0.00 $0.00
425.40 Property Damage $0.00 $0.00 $0.00 $0.00 $0.00
425 sub account totals $622.94 $0.00 $0.00 $0.00 $622.94
430.00 Grants $0.00 $0.00 $0.00 $0.00 $0.00
435.00 I D Badges/Security $0.00 $0.00 $0.00 $0.00 $0.00

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54
Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 4
440.00 PBIS $0.00 $0.00 $0.00 $0.00 $0.00
450.10 PSA-Flowers $0.00 $0.00 $0.00 $0.00 $0.00
450.20 PSA-Food $0.00 $0.00 $903.13 $903.13 $0.00
450.30 PSA-Staff Appreciation ($576.40) $0.00 $68.94 $645.34 $0.00
450.40 PSA-Clothing $0.00 $0.00 $0.00 $0.00 $0.00
450.50 PSA-Transfers In $344.60 $0.00 $25.00 $0.00 $319.60
450 sub account totals ($231.80) $0.00 $997.07 $1,548.47 $319.60
460.00 Sales Tax ($56.36) $13.88 $0.00 $42.48 $0.00
470.00 Scholarships $0.00 $0.00 $0.00 $0.00 $0.00
480.00 Yearbook $0.00 $0.00 $0.00 $0.00 $0.00
490.00 BOE to Reimburse $1,000.00 $1,073.03 $0.00 ($1,073.03) $1,000.00
499.00 Uncategorized Deposits $0.00 $0.00 $0.00 $0.00 $0.00
Series 4 total $3,848.25 $2,649.91 $2,727.13 $569.38 $4,340.41
Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 5
505.00 Agenda Books ($553.06) $946.12 $55.78 $0.00 $337.28
560.00 Library $0.00 $0.00 $0.00 $0.00 $0.00

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565.00 Instructional Materials $188.69 $0.00 $265.29 $76.60 $0.00
570.00 Math $0.00 $0.00 $0.00 $0.00 $0.00
572.00 Music $23.41 $0.00 $0.00 $0.00 $23.41
575.00 PE Uniforms and Equip
585.00 Science and Technology
585.20 STEM Fair
585 sub account totals
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$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
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Series 5 total ($340.96) $946.12 $321.07 $76.60 $360.69
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55
Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 6
605.00 Allotment $0.00 $0.00 $38.35 $883.03 $844.68
610.00 Mileage $0.00 $0.00 $0.00 $0.00 $0.00
615.00 Office/Copier Supplies $446.71 $0.00 $1,476.72 $1,085.00 $54.99
620.00 Postage $0.00 $0.00 $0.00 $0.00 $0.00
625.00 Professional Development $0.00 $0.00 $0.00 $0.00 $0.00
630.00 Dues/Membership $0.00 $0.00 $0.00 $0.00 $0.00
635.00 Registration $0.00 $0.00 $0.00 $0.00 $0.00
640.00 Meals/Travel/Lod $0.00 $0.00 $0.00 $0.00 $0.00
645.00 Educ Materials $0.00 $0.00 $0.00 $0.00 $0.00
650.50 Public Relations $0.00 $0.00 $0.00 $0.00 $0.00
655.00 Staff Mtg Supplies $0.00 $0.00 $0.00 $0.00 $0.00
Series 6 total $446.71 $0.00 $1,515.07 $1,968.03 $899.67
Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 7
701.00 Awards $0.00 $0.00 $791.07 $801.11 $10.04
705.00 Bank Interest and Charges ($2.08) $0.00 $6.70 $10.00 $1.22
710.00 Bank Err/Corrections $5.60 $0.00 $0.00 $0.00 $5.60
715.00 Donations $0.00 $150.00 $0.00 $0.00 $150.00

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720.00 FR/General Fundraiser $0.00 $0.00 $0.00 $0.00 $0.00
720.01 FR/Giant $0.00 $0.00 $0.00 $0.00 $0.00
720.02 FR/Safeway Escript
720.03 FR/Target
720.04 FR/Student Pictures
720.05 FR/Bookfair
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$0.00
$0.00
$0.00
$0.00
$0.00
$93.65
$1,446.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
($22.78)
($678.90)
$0.00
$0.00
$70.87
$767.10
$0.00
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720.06 FR/Chic-Fil-A $0.00 $61.95 $0.00 ($6.19) $55.76
720.07 FR/Claire's Gourmet $0.00 $2,681.60 $1,896.80 ($766.46) $18.34
720.08 FR/5k Walk $0.00 $0.00 $0.00 $0.00 $0.00
720.09 FR/Box Tops For Education $0.00 $131.30 $0.00 ($13.13) $118.17
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720.10 FR/Holiday Store $0.00 $0.00 $0.00 $0.00 $0.00

720.11 FR/Seabrook Day/Flea Market $0.00 $0.00 $0.00 $0.00 $0.00
720 sub account totals $0.00 $4,414.50 $1,896.80 ($1,487.46) $1,030.24
725.00 Furniture and Equipment $0.00 $0.00 $0.00 $0.00 $0.00
730.00 Health Room/Aide $0.00 $0.00 $0.00 $0.00 $0.00
735.00 Maint of School $0.00 $0.00 $15.00 $15.00 $0.00
740.60 Special Events $0.00 $50.00 $800.91 $770.69 $19.78
745.00 Student Welfare $0.00 $0.00 $0.00 $0.00 $0.00
750.10 Vending Faculty Comm $0.00 $0.00 $0.00 $0.00 $0.00
750.20 Vending Sponsorship $0.00 $0.00 $0.00 $0.00 $0.00
750.30 Vending Student Comm $0.00 $0.00 $0.00 $0.00 $0.00
750 sub account totals $0.00 $0.00 $0.00 $0.00 $0.00
799.00 Prior Year Carryover $12,890.18 $0.00 $987.44 ($3,872.69) $8,030.05
Series 7 total $12,893.70 $4,614.50 $4,497.92 ($3,763.35) $9,246.93
Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 8
800.00 Unclaimed Property $0.00 $0.00 $0.00 $0.00 $0.00
805.00 Agenda Books $0.00 $0.00 $0.00 $0.00 $0.00
810.00 Classrm Materials/Suppl $0.00 $0.00 $513.01 $580.00 $66.99
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Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 8
815.00 Computer Lab $0.00 $0.00 $0.00 $0.00 $0.00
820.00 English $0.00 $0.00 $0.00 $0.00 $0.00
825.00 Math $0.00 $0.00 $0.00 $0.00 $0.00
830.00 Mock Trail $0.00 $0.00 $0.00 $0.00 $0.00
835.00 Testing Activities $0.00 $0.00 $398.12 $405.00 $6.88
840.00 Science $0.00 $0.00 $0.00 $0.00 $0.00
845.00 Special Education $0.00 $0.00 $15.99 $20.00 $4.01
Series 8 total $0.00 $0.00 $927.12 $1,005.00 $77.88
Total Regular Accounts $17,425.93 $8,957.53 $10,408.47 $0.00 $15,974.99

End of Regular Accounts

Account Beg. Yr. Bal Receipts Disbursements Transfers Ending Bal.
Series 1
100.00 Chevy Chase $17,425.93 $8,957.53 $10,408.47 $0.00 $15,974.99
110.00 Savings Accounts $0.00 $0.00 $0.00 $0.00 $0.00
120.00 Money Market Accounts $0.00 $0.00 $0.00 $0.00 $0.00
Series 1 total $17,425.93 $8,957.53 $10,408.47 $0.00 $15,974.99

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Total Asset Accounts $17,425.93 $8,957.53 $10,408.47 $0.00 $15,974.99

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End of Asset Accounts
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57
 ATTACHMENT 6.3
Available Funds Report

As of : 6/30/2016

Total Assets : Less Restricted : Available Funds :

$15,974.99 $5,750.51
= $10,224.48

Asset Funds
Account Description Amount
100.00 Chevy Chase $15,974.99
110.00 Savings Accounts $0.00
120.00 Money Market Accounts $0.00

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$15,974.99

Restricted Funds
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Account Description Amount

307.00 School Patrols $0.91

308.00 Employee Sunshine Fund $0.00
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309.00 TAG $41.75

310.00 Class Accounts $0.00
310.10 1st Grade Account $187.78
310.20 2nd Grade Account $136.12
310.30 3rd Grade Account $359.52
310.40 4th Grade Account $266.99
310.50 5th Grade Account ($53.00)
310.60 6th Grade Account $0.00
310.70 Kindergarten Account $105.89
320.00 School Store $3.45
322.00 SGA $0.00
402.00 Bookfair-Restricted $0.00
405.10 Central Office Sub Teachers $0.00
405.20 Central Office Tuition $0.00
410.00 Charity (outgoing) $0.00
410.10 Direct Relief International $40.00
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58
 Available Funds Report
Seabrook Elementary School
As of : 6/30/2016

415.00 Donations $88.40

415.10 Delta Sigma Theta Soriety $0.00
415.15 Library Books Donation $46.16
415.20 Donation-Parents Day $51.88
415.25 Math $28.09
415.35 Male/Female Achievement $0.00
415.40 Seabrook RecreationCouncil $0.77
418.00 Hispanic Heritage Day $21.39
420.00 Field Trips $2,121.18
425.10 Core Textbook Fines $235.39

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425.20 Library Books $387.55
425.30 Non-Core Textbooks $0.00
425.40
430.00
435.00
Grants
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Property Damage

I D Badges/Security
$0.00
$0.00
$0.00
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440.00 PBIS $0.00
450.10 PSA-Flowers $0.00
450.20 PSA-Food $0.00
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450.30 PSA-Staff Appreciation $0.00

450.40 PSA-Clothing $0.00
450.50 PSA-Transfers In $319.60
460.00 Sales Tax $0.00
470.00 Scholarships $0.00
480.00 Yearbook $0.00
490.00 BOE to Reimburse $1,000.00
499.00 Uncategorized Deposits $0.00
505.00 Agenda Books $337.28
560.00 Library $0.00
565.00 Instructional Materials $0.00
570.00 Math $0.00
572.00 Music $23.41
575.00 PE Uniforms and Equip $0.00
585.00 Science and Technology $0.00
585.20 STEM Fair $0.00

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59
 Available Funds Report
Seabrook Elementary School
As of : 6/30/2016

$5,750.51

I certify the above information is correct

Principal's
Signature
Date
Preparer's

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Signature Date

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60
 ATTACHMENT 6.4

Prince George's County Public Schools Workpaper No.

Student Activity Fund Audit Initials Date
XYZ High School Reviewed by
Auditor: Cleared
Audit Workpaper Review Notes

Poin Reviewer's Date Cleared

W/P Ref. Auditor's Comments
t# Comments Cleared by

Insert final report,

transmittal, and action
plan when available
C-series (sign-off at that time)

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61
 ATTACHMENT 6.5
Prince George's County Public Schools WP No. PLN 3
#REF! GENERAL IC QUESTIONNAIRE Initials Date
Student Activity Fund Audit Prepared By: 0
#REF! Approved By:
Internal Control Questionnaire

PURPOSE: To establish whether or not the school's general accounting policies and procedures related to the student activity funds are
. consistent with those prescribed in the Accounting Procedures Manual (APM).

SCOPE: The schools student activity funds for the period (INSERT PERIOD)

The schools financial records provided by the secretary/bookkeeper, observations made by the auditor and interviews with the
SOURCE: principal and bookkeeper.

INTERNAL CONTROL QUESTIONNAIRE

GENERAL

Answer
Question Remarks
N/A Yes No
Is the bookkeeper preparing the monthly
package of reports (Insolvency Report, Unpaid Bills
Report, YTD Financial Report, Bank Reconciliation
1 Report, Journal Entries and Bank Statement) for
review by the principal and doing so in a timely
manner?

Is sales tax collected when taxable goods are

sold by the school and are the amounts collected
2
subsequently forwarded to the appropriate

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authorities?
Is the monthly package of financial reports,
3 prepared by the bookkeeper, reviewed by the
principal?
Are school cafeteria funds kept separate from
4

6
the student activity funds?
Are PTA funds handled by that association,
separate from the student activity funds?
Have the bookkeeper and the principal read the
"School Accounting Policies and Procedures
Manual" and are they familiar with it's contents?
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Are the acoount names prescribed in the "School
7 Accounting Policies and Procedures Manual"
being used by the school?
Are copies of statements from all of the schools
8 bank accounts (savings, CD's, etc.) included with
the financial reports?
Sa

9 Financial statement are prepared by, and financial records are maintained by:

Name Title

10 Deposits are taken to the bank by:

Name Title

11 Are school funds deposited in a savings account and/or CDs?

Yes No No If yes, who is the custodian?

12 12. Does any other individual ever perform the above accounting duties?

Yes No No If yes, indicate below:

Name Title

13. The authorized check signers are:

a. Name Title
Principal

b. Name Title Instuctional Lead Teacher

c. Name Title Bookkeeper

d. Name Title

In the following combinations:

Does any of the responses constitute a significant compliance weakness or deficiency? Yes No
( Refer to w/p: PLN 4 for H/L risk determination)

62
 ATTACHMENT 6.5.1
FRAUD RISK ASSESSMENT QUESTIONNAIRES
Workpaper No. PLN 2
XYZ School
Fraud Risk Inquiries
6/30/XX

Fraud Inquiries: (INSERT PRINCIPAL or BOOKKEEPER'S NAME), Principal

The purpose of this form is to document factors considered and procedures performed by the engagement
team to identify risks of misstatement of the school’s financial statements due to fraud. Identified fraud risks
should be considered individually and collectively, because the presence of any identified risks in isolation may
not necessarily be significant.

1. Do you have any knowledge of fraud, alleged fraud or suspected fraud affecting the school? If yes, explain

2. What are the internal controls (measures) in place at this school to prevent fraud or the risk (likelihood) of
fraud occurring?

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3. If fraud or the risk of fraud is identified at this school, what is your process for responding? (may be a specific
incident e.g. theft of asset from the school or potential fraud in account balances e.g. a restricted account)
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4. Does management communicate their expectation for administration of Student Activity Funds and
employees’ ethical behavior? If so, how is that communication made to employees?
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Signature ________________________________________ Date ____________________________

Principal

Definition of Fraud Risk – probability or likelihood of fraud occurring.

Definition of Internal Controls – Process designed to ensure that student activity funds is collected, processed and deposited and disbursed in
accordance with policies and procedures of School Accounting Manual.

For Internal Audit Use Only

Do any of the responses give rise to a control weakness or issue of noncompliance Y___ or N _____

63
 Workpaper No. PLN 2.2

Prince George’s County Public Schools

Fraud Risk Assessment Questionnaire
Athletic Department

1. As you are probably aware, auditors are required to assess the risk of fraud. Therefore, we need to ask
you and other employees some very specific questions about this subject. Do you understand?

2. When we talk about fraud in the school, we're referring to a whole range of activities where people steal
from the school, lie to management, take unfair advantage of the school or fail to report funds for

e
recording in student activity funds. Do you think fraud is a problem for the school in general? Why or
why not?

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3. Do you think the athletic department has a problem with fraud? Why or why not?
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4. Are all funds collected for athletic / sporting activities as specified by the BOE for the audit period,
Sa

remitted to the bookkeeper and reported in the school’s accounting system?

5. Frequent small thefts can add up to a lot of money. If you knew that someone was stealing from this
school, what would you do?

6. Do you know of anyone who might be stealing or taking unfair advantage of this school or department?

7. Suppose someone who works in this school or department decided to steal or commit fraud. How could
he or she do it and get away with it?

64
8. In your opinion, who is beyond suspicion when it comes to committing fraud in this school or
department?

9. Are you aware or anyone who is not an employee of PGCPS that may be collecting, expending or
profiting from funds generated from students’ participation in athletic / sporting activities?

10. Is there any other information you wish to furnish regarding possible fraud or other operational issues
related to this organization or department?

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Completed by (print name): ________________________
Signature: ______________________________
Title: ______________________________

For Internal Audit Use Only

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Do any of the responses give rise to a control weakness or issue of noncompliance Y___ or N _____
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65
 Workpaper No. PLN 2.2

Prince George’s County Public Schools

Fraud Risk Assessment Questionnaire
Before and After School Extended Learning Program (BASELP)
6/30/XX

1. Are you aware of any instance of fraud in the BASELP? If yes, explain.

2. Were all funds collected for BASELP as specified by the BOE for the audit period, properly documented, processed and deposited with the financial
institution?

3. Do you know of anyone who might be stealing or taking unfair advantage of the BASELP?

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4. If you knew that someone was stealing from this program, what would you do?

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5. Suppose someone who works in this site decided to steal or commit fraud. How could he or she do it and get away with it?
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6. In your opinion, who is beyond suspicion when it comes to committing fraud at this BASELP site?

7. Do you have a secure place to store fees collected, until deposits are made? If yes, describe.
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Completed by (print name): ________________________

Signature: ______________________________
Title: ______________________________

For Internal Audit Use Only

Do any of the responses give rise to a control weakness or issue of noncompliance Y___ or N _____

66
 ATTACHEMNT 6.6
CASH RECEIPTS QUESTIONNAIRE
Prince George's County Public Schools Workpaper No. PLN 3.1
### Initials Date
Student Activity Fund Audit Prepared By: 0
### Approved By:
Receipts Questionnaire

PURPOSE: To obtain an understanding of the design of internal controls over the cash receipts process at (INSERT SCHOOL).
.

SCOPE: The school's cash receipts activity for (INSERT PERIOD).

SOURCE:

INTERNAL CONTROL QUESTIONNAIRE

CASH RECEIPTS

Answer
Question Remarks
N/A Yes No

Are hours for receiving money by the office

1
restricted? If so, indicate what they are.

e
Are monies on hand, awaiting deposit kept in a
2
safe place? Indicate where and who has access.

4
Are checks received for deposit stamped with the
schools name, account number and the phrase
"For Deposit Only"?
Are each day's receipts deposited intact (i.e. no
cashing of checks out of funds awaiting deposit
or purchases made out of these funds) and
pl
m
without delay?

5 Are receipts given for all money collected ?

Sa

Are deposits recorded in the school's accounting

6
system in a timely manner?

Is the bookkeeper prohibited from receiving funds

7 directly from a payor without an accompanying
TCT/MTF?
Do staff members submit completed TCTs/MTFs
8
with all money remitted to the office?

Are the approval copies of the TCT/MTF forms

returned to the staff member who prepared them
9
after the bookkeeper has counted the money and
verified it matches the amount on the form?

Are the staff member copies and the approval

copies of the TCT/MTF forms turned into the
10 principal or her/his designee(should be another
administrator and cannot be the bookkeeper) by
all staff members at the end of the school year?
Are the staff member copies and the approval
copies of the TCT/MTF forms turned in at the end
11 of the school year kept in a location that is
inaccessible to the bookkeeper until the auditor
has reviewed them?

Does any of the responses constitute a significant control weakness or deficiency? Yes No
( Refer to w/p: PLN 4 for H/L risk determination)

67
 ATTACHMENT 6.7

Prince George's County Public Schools

CASH DISBURSEMENT QUESTIONNAIRE Workpaper No. PLN 3.2
### Initials Date
Student Activity Fund Audit Prepared By: 0
### Approved By:
Disbursements Questionnaire

PURPOSE: To obtain an understanding of the design of internal controls over the cash disbursement process at (INSERT SCHOOL).
.

SCOPE: The schools disbursement activity for (INSERT PERIOD)

SOURCE:

INTERNAL CONTROL QUESTIONNAIRE

CASH DISBURSEMENTS

Answer
Question Remarks
N/A Yes No
1 Are checks prenumbered?
Are voided checks attached to the related check
2
stub with the signature removed?
Are cancelled checks attached to the related
3
check stub upon return from the bank?
Are checks that are prepared and signed by the
4

e
bookkeeper countersigned by the principal?
5 Are receipts obtained for all money paid out?
Are payments to persons for services rendered
6 to the school prohibited (except for special

8
functions)?
If special function security guards, etc. are paid,
are FICA taxes withheld and remitted to the
payroll department?
Is the signing or countersigning of checks in
advance prohibited?
pl
m
Is the practice of drawing checks payable to
9
"cash" prohibited?
Are monthly bank reconciliations prepared within
10 seven working days of the date that the bank
statement is received?
Are the following reviewed periodically by the
Sa

principal:
a. Bank reconciliation?
11
b. Cash disbursement journal?
c. Checkbook stubs and attached
cancelled checks?
Are entries recorded in the cash disbursement
12
journals on a timely basis?
13 Are loans to employees prohibited?
Is the cashing of personal checks for employees
14 out of cash on hand prohibited?

Does any of the responses constitute a significant control weakness or deficiency? Yes No
( Refer to w/p: PLN 4 for H/L risk determination)

68
 ATACHMENT 6.8
CLUBS & ORGS &VENDING IC QUESTIONNAIRE

Prince George's County Public Schools Workpaper No. PLN 3.3

### Initials Date
Student Activity Fund Audit Prepared By:
### Approved By:
Clubs/Orgs and Vending Control Questionnaire

PURPOSE: To obtain an understanding of the design of internal controls over the clubs and organizations and vending machine operations at
the school's location.

SCOPE: Activity in the school's club and organization accounts and vending machine accounts (INSERT PERIOD).

SOURCE:

Clubs and Organizations:

Does the school maintain a list of their clubs/organizations which shows who the
1
faculty sponsors are and who the student officers are?
Do any of the clubs or organizations conduct fund raisers solely for their benefit?
2
If the answer is "No", skip to Question # 7.
Have "Fund Raiser Request and Authorization" forms been completed and
3
approved for all club and organiztion fundraisers?
Based on the contracts that the clubs and organizations have with the fund raising
4 companies,does the responsibility for collecting and remitting the sales taxes due

e
fall on the school or the fund raising company?
If the school is responsible for collecting and remitting the sales taxes due on fund
5
raiser sales, is there evidence that they have been doing so?
Have "Fund Raiser Completion" forms been filled-out and turned in for all club and
6
organiztion fundraisers conducted?
pl
7 Are "Annual Fund Raising Summary Reports" being prepared each year?

Vending Machine Operations:

m
1 What types of vending machines does the school operate?
Soda
Snacks
Other(Juice, etc.)
2 Soda machines
a. How many machines do they have?
Sa

b. Do any of the machines serve the faculty exclusively? If yes, how many?

If there are machines that serve the faculty exclusively, are the revneues and expenses for these machines
c. segregated from other machine revenues and expenses?

d. Is/are the machine(s) self-service or full-service?

Full-service
1. Name and address of vending company

2. Name of company representative servicing account

3. Does a school representative supervise the loading of the machine and the removal & counting of the cash?
Self-service
Is there a single key to the machine that allows the user access to the entire machine (stock and money) at
1. once or are there multiple keys that can be used to give access to either the stock or the money but not both?

2. If there is a single key who has access to it?

3. Who is responsible for stocking the machine?
4. Who removes the money from the machine and counts it?
If different individuals stock the machine and remove and count the money, do they watch one another
5. perform their respective duties?

6. If multiple keys who has acces to each key?

Money
Stock
7. Does anyone supervise the restocking of the machine and/or the removal and counting of the money?
8. Where is the inventory kept?
9. Is the inventory storage area secure?
10. Who has access to the inventory storage area?

69
Prince George's County Public Schools Workpaper No. PLN 3.3
### Initials Date
Student Activity Fund Audit Prepared By: 0
### Approved By:
Clubs/Orgs and Vending Control Questionnaire

3 Snack machines
a. How many machines do they have?
b. Do any of the machines serve the faculty exclusively? If yes, how many?
c. If there are machines that serve the faculty exclusively, are the revneues and expenses for these machines
d. Is/are the machine(s) self-service or full-service?
Full-service
1. Name and address of vending company

2. Name of company representative servicing account

3. Does a school representative supervise the loading of the machine and the removal & counting of the cash?
Self-service
Is there a single key to the machine that allows the user access to the entire machine (stock and money) at
1. once or are there multiple keys that can be used to give access to either the stock or the money but not both?

2. If there is a single key who has access to it?

3. Who is responsible for stocking the machine?
4. Who removes the money from the machine and counts it?
5. If different individuals stock the machine and remove and count the money, do they watch one another
6. If multiple keys who has acces to each key?
Money

e
Stock
7. Does anyone supervise the restocking of the machine and/or the removal and counting of the money?
8. Where is the inventory kept?
9. Is the inventory storage area secure?
10. Who has access to the inventory storage area?

4 Other vending machines

a. How many machines do they have?
pl
b. Do any of the machines serve the faculty exclusively? If yes, how many?
c. If there are machines that serve the faculty exclusively, are the revneues and expenses for these machines
m
d. Is/are the machine(s) self-service or full-service?
Full-service
1. Name and address of vending company

2. Name of company representative servicing account

3. Does a school representative supervise the loading of the machine and the removal & counting of the cash?
Sa

Self-service
Is there a single key to the machine that allows the user access to the entire machine (stock and money) at
1.
once or are there multiple keys that can be used to give access to either the stock or the money but not both?
2. If there is a single key who has access to it?
3. Who is responsible for stocking the machine?
4. Who removes the money from the machine and counts it?
If different individuals stock the machine and remove and count the money, do they watch one another
5. perform their respective duties?

6. If multiple keys who has acces to each key?

Money
Stock
7. Does anyone supervise the restocking of the machine and/or the removal and counting of the money?
8. Where is the inventory kept?
9. Is the inventory storage area secure?
10. Who has access to the inventory storage area?

Does any of the responses constitute a significant control weakness or deficiency? Yes No
( Refer to w/p: PLN 4 for H/L risk determination)

70
 ATTACHMENT 6.9
Bank Reconciliation - Reprint

Bank Name : Capital One Bank Statement Date : 4/30/2016

Today's Date : 7/14/2016
Bank Account : 7794301921
2:42:26 PM
Original Print Date : 6/16/2016

Statement Ending Balance : $18,279.13

Add: Deposits in Transit $0.00

Add: Bank Fees $13.35

Total : $18,292.48

Less: Outstanding Checks $460.33

e
Reconciled Bank Balance : $17,832.15

Other Assets :

Savings Accounts
pl
Money Market Accounts
$0.00
$0.00
m
Bank Balance + Other Assets : $17,832.15
Sa

Comments :

I certify the above information is correct

Principal's Signature Date

Preparer's Signature Date

71
 ATTACHMENT 6.10

Prince George's County Public Schools CASH RECEIPT TOC TEMPLATE Workpaper No. G-4
### Initials Date
Student Activity Fund Audit Prepared By: DM 03/10/15
### Approved By:
Cash Receipts Test: FY ***

To determine whether internal controls over the cash receipt process are operating effectively and whether (INSERT SCHOOL NAME) is in compliance with the policies and procedures for
Purpose:
the cash receipts as documented in the Accounting Procedures Manual (APM)
Source: The schools financial records (SFO Receipt Register, MTFs, and Deposit Tickets, etc.)
Scope: IA randomly selected (* transactions) for the period ***** through ***** based on Practice Advisory Std. 2320-3 (Refer to w/p PLN 6).
Procedure/ IA obtained and reviewed the financial records identified in the source and performed the following audit steps:
Audit Steps: A.      Verified cash receipts were properly supported (include MTF, class list, deposit slip and Quickbooks report)
B.      Vouched the amount per MTF to the bank statement
C.      Reviewed deposit ticket and MTF to verify timeliness of deposit
D.       Ensured that amounts were accurately recorded in Quickbooks (amount and coding).
E.       Verified that MTF was properly signed by staff and approved by the bookkeeper.
F.     Ensured that there was no swapping by the teacher by verifying that section 1 and section 2 of the MTFs agree.
G.      Ensured that changes made to MTFs were done according to the MTF Instructions.

e
H.        Determined that the cash receipt process was in accordance with BOE policies and procedures.
Based on the procedures performed internal controls over the cash receipts process were operating effectively and (INSERT SCHOOL NAME) was in compliance with the policies and
Conclusion:
procedures for cash receipts as documented in the APM.
Legend: = Yes; X = No 
X

pl
Item Deposit # Days
# MTF Date Date Late Num Name Memo Account Paid Amount Comments A B C D E F G H I
1 0
2 0
3 0
4 0
5 0

m
6 0
7 0
8 0
9 0
10 0
11 0
12 0
Sa
13 0
14 0
15 0
16 0
17 0
18 0
19 0
20 0
21 0
22 0
23 0
24 0
25 0
$0.00 Noted Exceptions 0 0 0 0 0 0 0 0 0
% of sample 0% 0% 0% 0% 0% 0% 0% 0% 0%

72
 ATTACHMENT 6.11

CASH DISBURSEMENTS TOC TEMPLATE

Prince George's County Public Schools Workpaper No. H-1
#### Initials Date
Student Activity Fund Audit Prepared By: 0 03/10/15
#### Approved By:
Cash Disbursements Test: FY 2014

To determine whether internal controls over the cash disbursement process are operating effectively and whether XYZ ES is in compliance with the policies and procedures for the cash
Purpose:
disbursement as documented in the Accounting Procedures Manual (APM).
Source: The schools financial records (SFO Check Register, vendor invoices, store receipts, contracts, cancelled checks/images)
Scope: IA randomly selected (6 transactions) and judgementally selected (0 transactions) for the period June 30, 2013 through June 30, 2014 based on Practice Advisory Std. 2320-3 (Refer to w/p PLN 6).
Procedure/ IA obtained and reviewed the financial records identified in the source and performed the following audit steps:
Audit Steps: A.      Footed amounts on invoice and/or store receipts and ensured that it matched the amount recorded in Accounting System.
B.      Ensured that expenditures were adequately approved
C.      Examined cancelled checks to determine two signers were included, amount and payee agreed to the vendor and invoice amount.
D.      Verified the amount was properly recorded in the Accounting System.
E.       Ensured expenditure was incurred in accordance with BOE policies and procedures.
F.       Ensured payments were remitted to vendor in a timely manner.
Based on the procedures performed, internal controls over the cash disbursement process were not operating effectively and XYZ ES was not in compliance with the policies and

e
Conclusion:
procedures for cash disbursements as documented in the APM.
Legend: = Yes; X = No; CNL=Cannot Locate X


Item # Paid Amount

pl
Date Num Name Memo Account Comments A B C D E F

m
$0.00 Noted Exceptions 0 0 0 0 0 0
% of sample 0% 0% 0% 0% 0% 0%
Sa

73
 ATTACHMENT 6.12
Prince George's County Public Schools VOIDED CHECKS Workpaper No. H-3
Initials Date
Student Activity Fund Audit Prepared By: 09/01/15
3/1/08 - 6/30/15 Approved By:
Voided Checks Test: FY 2014 & FY 2015

To determine whether internal controls over the voided check process are operating effectively and whether (INSERT SCHOOL HERE)
Purpose:
is in compliance with the policies and procedures for voided checks as documented in the Accounting Procedures Manual (APM).

Source: The schools financial records (QuickBooks voided/deleted transaction summary report, missing check report and SFO voided check register and school files)
Scope: Voided checks for the audit period 7/1/13 through 6/30/15. 
Procedure/ IA obtained and reviewed the financial records identified in the source and performed the following audit steps:
Audit Steps: A. Verified that the check was properly voided by removal of the signature line
B. Verified that the voided check was entered into the QuickBooks or SFO accounting system
C. Verified that a School Funds Expenditure form was completed and approved by the principal
Conclusion: Based on the procedures performed, internal controls over the voided check process were / were not operating effectively and (insert

e
Legend: = Yes; X = No; N/A = Not Applicable

Num Action Entered/Last Modified Date Name Memo Split Amount A B C Comments
FY 14

pl
Check 1763
Unrestricted:General -
Unrestricted:School
1763 Voided Transac 01/15/2014 8:50:49 08/08/13 JANE D VOID: VOID: Equip & Furn 0.00   

m
Unrestricted:General -
Unrestricted:School
1763 Added Transac 08/14/2013 14:41:57 08/08/13 JANE D VOID: Equip & Furn -249.99
Sa

74
 ATTACHMENT 6.13
CANCELLED CHECKS
Prince George's County Public Schools Workpaper No. H-
(School Name) Initials Date
Student Activity Fund Audit Prepared By:
4/1/08 - 8/31/15 Approved By:
Cancelled Checks 4/1/08 - 6/30/13

To determine whether internal controls over the check writing process are operating effectively and whether (School Name) is in compliance with the policies
Purpose:
and procedures for processing checks as documented in the Accounting Procedures Manual (APM).
Source: The schools financial records (SFO Disbursements by Month Report, cancelled checks and expenditure forms).
Scope: Cancelled checks for the audit period ***** through ******. 
Procedure/ IA obtained and reviewed the financial records identified in the source and performed the following audit steps:
Audit Steps: A. Verified that checks processed met the two signature requirement
B. Verified that only persons authorized to sign checks performed the signing function

e
C. Verified that checks were written for items or activities that are allowable by APM
Based on the procedures performed, internal controls over the check writing process were not operating effectively and (school name) was not in
Conclusion:
compliance with the policies and procedures for the check writing policy as documented in the APM.

pl
Legend: = Yes; X = No; N/A = Not Applicable; CNL = Could not Locate
Item # Date Num Name Memo Account Paid Amount Comments A B C

FY 08 Unable to locate FY 08 files

FY 09 Unable to locate FY 09 files

m
Sa
FY 10

FY 11

FY 12

$0.00 Noted Exceptions 0 0 0

% of sample 0% 0% 0%

75
 ATTACHMENT 6.14

Prince George's County Public Schools Workpaper No. I-1

(School Name) Initials Date
BASELP Prepared By:
12 months Approved By:
Tuition Payments

To determine whether internal controls over the tuition collection process are operating effectively and whether (school
Purpose: Name) BASELP is in compliance with the policies and procedures for the tuition collection process as documented in 
the BASELP Manual.
Source: The schools financial records (Receipt Books, Validated Deposit Tickets, Enrollment Reports)
Scope: IA randomly selected 8 tuition pay periods for the past 12 months based on SIA sampling methodology (Refer to w/p PLN 6). 
Procedure/ 1. IA obtained and reviewed the financial records identified in the source and performed the following audit steps:
Audit Steps: A. Ensured funds were stored securely between collection and deposit
B. Ensured funds were deposited within 1 day of collection
C. Ensured funds were recorded on a deposit ticket by the BASELP staff
D. Ensured funds deposited were in agreement with the validated deposit ticket (VDT)

e
E. Ensured that funds deposited were in agreement with the amount that should be collected per the enrollment report for the
specified period tuition/registration fee/late payment fee/late pick-up fee)

2. IA obtained and reviewed the facility's license to determine:

pl
A. Whether it is current
B. The program is in compliance with the required student/teacher ratio
Based on the procedures performed internal controls over the tuition collection process were NOT operating effectively and(school name)
Conclusion:
BASELP was NOT in compliance with the policies and procedures for tuition collection process as documented in the BASELP Manual.
Legend: = Yes; X = No

m
Procedure 1

Tuition Tuition Receipt Deposit # Days

Item # Period Date date Date Late Receipt #s Paid Amount A B C D E Comments

1
Sa
2
3
4
5
6
7
FY 16
8

$0.00 0 0 0 0 0
0% 0% 0% 0% 0%

Procedure 2
1 A B

 

76
Prince George's County Public Schools Workpaper No. I-2
(School Name) Initials Date

BASELP Prepared By:

3 months Approved By:

Food & Nutrition Supper Count

To determine whether only students enrolled in BASELP are receiving snacks from FNS at (School Name)
Purpose:
BASELP.
Source: The schools snack count and student enrollment reporting.

IA judgementally selected 3 student enrollment and snack count reports for the past 12 months based on SIA 

Scope:
sampling methodology (Refer to w/p PLN 6). 

e
Procedure/ IA obtained and reviewed the BASELP records identified in the source and performed the following audit steps:

pl
Audit Steps: A. Ensured that the snack count agreed to the monthly student enrollment

Based on the procedures performed it was determined that only students enrolled for FY 16 received snacks from
Conclusion:
FNS at (School Name) BASELP.

m
Legend: = Yes; X = No

Average
Item Meals Program Daily Suppers
Sa
# Month Prepared Enrollment Attendance Served Variance A Comments

1 August 2015 155 155 136 130 25 

Noted Exceptions 0

% of sample 0%

77
Prince George's County Public Schools Workpaper No. I-3
(School Name) Initials Date
BASELP Prepared By:
20% or 10 Students Approved By:
Student Registration Files

To determine whether students' admission forms and/or withdrawal notices were on file and properly approved at (School
Purpose:
Name) BASELP.
Source: The schools student records (admission and/or withdrawal forms)
IA judgementally selected 6 (smaller of 20% or 10) students files from the BASELP for the past 6 months of the audit period
Scope:
based on SIA sampling methodology (Refer to w/p PLN 6). 
Procedure/ IA obtained and reviewed the student records identified in the source and performed the following audit steps:
Audit Steps: A. Ensured admission forms were on file

e
B. Ensured admission forms were properly approved 
C. Ensured withdrawal notices were on file

pl
Based on the procedures it was determined that students admission forms and/or withdrawal notices were on file but not
Conclusion:
properly approved at (School Name) BASELP.
Legend: = Yes; X = No; N/A = Not Applicable
Average enrollment - 31

m
Item Start/Withdrawal Approval
# Student Name Date Date # Days Late A B C Comments

1 Kameron Jones 08/19/14  X N/A Not approved by secretary

Sa
2 Dylan Shelton 10/19/14  X N/A Not approved by secretary
Not approved by secretary; Registration form
date 9/2/14; Note from parent on file that
3 Ayoade Oladumejij 09/02/14  X  student's last day 1/18/15
Not approved by secretary; Registration form
4 Brandon Phoenix 01/08/15  X N/A date 1/8/15
Not timely approved by secretary as enrolled
5 Alejanora Alvarez 08/20/15 09/03/15 13  X N/A in school - 13 days
Not approved timely by secretary - 15 days;
6 Kembumbala Withdrawn 9/8/15 - no withdrawal notice on
Maruiqueen 08/18/15 09/03/15 15  X X file

Noted Exceptions 0 6 1
% of sample 0% 100% 17%

78
 ATTACHMENT 6.15

Prince George's County Public Schools

School Audits Selection
Evaluation Form
Evaluation Points
Evaluation Criteria Assessed

1. School was not audited within the

required interval

2. There was a recent principal and

or bookkeeper change

3. The school is insolvent

4. There was a high volume of

accounting transactions (Checks
processed - ES > 80; MS > 160 and
HS >400) in the most recent audit
period.

5. Missing funds were reported

during the previous audit

6. There were more than 3 repeat

findings in the most recent audit
report

Total: 0

NOTE:
1 Each criterion will be assessed 5 points
2 Assessment will be performed at the beginning of each school year.
3 A reassessment will be performed at the beginning of the 3rd quarter.
4 Audits of schools with the highest points assessed will be prioritized.

79
 ATTACHEMENT 6.16
 
 
PGCPS INTERNAL AUDIT 
GAGAS INDEPENDENCE DETERMINATION 
NONAUDIT SERVICES 
FY 2017 

Assess Condition or activity for   
threats to independence 
 
 
IA has a group of Property Control NO
Specialists who perform Public Property
  NO 
Assessments (inventory) at schools and Proceed 
offices audited by Internal Auditors.   
 
    
Threat Identified?  
 
YES 
  

Is threat related to a non‐audit 
service?  Is the non‐audit service specifically 
YES  prohibited in GAGAS paragraphs 
Public Property Assessments is 3.36 or 3.49 through 3.58 
considered a non-audit service. Public Property Assessments is
not specifically prohibited by
GAGAS para. 3.36 or 3.49-3.58 
NO 

Assess threat for significance  NO 
Public Property Assessment:
 
 Is not management’s
  responsibility
 Is performed only by Property Control
Specialists (not  auditors), eliminates
management participation threats
 Does not involve  preparation of
accounting records or recording of
 
accounting transactions
 Does not involve internal control
 
monitoring
 Precludes information
  technology
system services
 

Is threat significant?  
The threat of Public Property NO 
Assessments is not deemed significant Proceed 

 
 
Assessment Performed by:  Michele Winston, CPA,   
                                                  Director, Internal Audit  80